IceCure Medical Ltd. — Form 20-F summary
Period clarification: The supplied filing is an annual report for the fiscal year ended December 31, 2022, filed March 29, 2023—not a 2021 Q4 filing. It reports audited U.S. GAAP results for 2022, with comparisons to 2021 and 2020.
Business context
IceCure is an Israeli commercial-stage medical-device company developing and marketing liquid-nitrogen cryoablation systems for tumors. ProSense is its lead commercial product; the MultiSense system and next-generation single-probe system remained in development. The company had FDA clearances for specified uses, but had not received U.S. marketing authorization for malignant breast cancer—the key indication targeted for growth.
Financial results and liquidity
| USD, thousands, except per-share data | 2022 | 2021 | Change |
|---|---|---|---|
| Revenue | 3,085 | 4,138 | -25% |
| Gross profit / margin | 1,445 / 47% | 2,195 / 53% | Profit -34%; margin -6 percentage points |
| Research and development expense | 9,123 | 5,877 | +55% |
| Sales and marketing expense | 3,204 | 1,917 | +67% |
| General and administrative expense | 5,857 | 4,125 | +42% |
| Operating loss | 16,739 | 9,724 | Loss increased |
| Net loss | 16,978 | 9,895 | +72% loss |
| Basic and diluted net loss per share | $0.46 | $0.35 | Higher loss per share |
| Net cash used in operating activities | 14,292 | 12,605 | More cash used |
Revenue fell chiefly because system sales declined 36% to $1.002 million and revenue recognized from exclusive distribution agreements declined 46% to $747,000. Disposable sales rose 11% to $1.336 million. The company attributed lower gross profit and margin primarily to reduced distribution-agreement revenue; product-sales gross margin was 30% in both years.
At December 31, 2022, cash and cash equivalents were $23.659 million; working capital was $23.794 million; accumulated deficit was $75.409 million; and total assets were $30.188 million. Cash declined by $1.606 million during 2022. Financing provided $13.577 million, including $13.569 million net proceeds from the December 2022 share offering. There was no material conventional borrowing disclosed; lease liabilities totaled $597,000. IIA grant obligations are royalty-bearing: grants including interest totaled about $2.575 million, with approximately $2.076 million net of royalties paid remaining.
Management said available cash was expected to fund at least 12 months of operations, while also stating that substantial additional capital would be required. The filing separately reports cash, cash equivalents and short-term deposits of $20.216 million as of March 29, 2023.
Material changes and notable developments
- Revenue decreased 25%, while operating expenses rose substantially; the net loss widened 72%.
- R&D spending increased as the company developed next-generation systems and pursued clinical and regulatory work. Sales and marketing expense also rose with expanded commercialization efforts.
- U.S. sales increased 28% to $604,000, but Japan revenue declined 18% to $1.130 million and Thailand revenue fell 97% to $30,000, partly reflecting lower distribution-related revenue and the prior-year initial Thailand order.
- The December 2022 offering issued 8,787,880 shares at $1.65 per share for approximately $13.6 million net. Shares outstanding increased to 45,623,434 at year-end from 35,780,335 a year earlier.
- Share-based compensation rose to $1.865 million from $316,000, contributing to higher operating expenses.
Outlook, risks and contingencies
- Regulatory and reimbursement: The company submitted a De Novo request in October 2022 for a narrow early-stage, low-risk breast-cancer indication in patients at high surgical risk. If the FDA requires a PMA pathway instead, management expects a longer, more costly approval process. CMS assigned a temporary Category III payment classification effective January 1, 2023, but payment potential is conditional on FDA marketing authorization; the cited facility fee is approximately $3,400. Permanent coding and broader reimbursement are not assured.
- Development plans: Management expected limited release of the next-generation single-probe system and new cryoprobes by the end of 2023, and FDA and CE submissions for MultiSense by mid-2026. Final five-year ICE3 trial follow-up data were expected in the first half of 2024. These are forward-looking plans, not achieved results.
- Commercial and funding risks: Sales remain minimal relative to operating costs. The company expects continuing losses and may need additional equity or debt financing; funding may be unavailable or dilutive. Commercial success depends on regulatory approvals, clinical evidence, physician adoption, distributor performance, reimbursement and manufacturing scale-up.
- Partners and operations: Terumo notified IceCure in February 2023 that it would stop distribution activities in Singapore effective March 31, 2023. The company relies on distributors and third-party suppliers, and reported exposure to supply, shipping-cost and quality risks.
- Other risks: The filing cites competition, COVID-19-related disruption, inflation and currency movements, geopolitical and military risks affecting Israel and the Russia-Ukraine situation, product-liability and cybersecurity risks, and restrictions attached to IIA-funded technology and manufacturing.
- Contingencies: A shareholder class-action certification motion concerning the 2021 private placement remained contested; the company said it would defend the matter and considered the claims without merit. A separate accessibility-related class-action motion was dismissed on March 5, 2023. The filing does not state a clear probable loss estimate for the pending matter.
The auditor gave an unqualified opinion on the consolidated financial statements. Management reported effective disclosure controls and internal control over financial reporting as of December 31, 2022; the auditor did not provide an internal-control attestation because of the company’s emerging-growth-company exemption.
Most important facts for investors to verify
- Confirm the reporting period: this is FY2022, not 2021 Q4, and review the audited statements and notes for full context.
- Track cash consumption against management’s runway statement, the March 29, 2023 cash-and-deposit balance, and future financing needs.
- Check FDA progress and the final pathway, scope and timing for breast-cancer authorization; verify the status of clinical data and reimbursement coverage.
- Monitor whether the China distributor achieves its $3.5 million minimum purchase target and the commercial effect of Terumo’s Singapore exit.
- Review dilution, including the December 2022 issuance, outstanding options, and any subsequent equity financing.
- Follow the pending private-placement litigation and any changes in the company’s assessment of potential exposure.