IceCure Medical Ltd. — 2021 Form 20-F
Period clarification: The supplied filing is an annual report for the fiscal year ended December 31, 2021, comparing full-year 2021 with 2020. It does not provide standalone 2020 Q4 results, despite the request metadata.
Business context
IceCure is an Israeli commercial-stage medical-device company developing and selling liquid-nitrogen cryoablation systems for tumors. ProSense is its lead commercial system; MultiSense and next-generation single-probe systems remain under development. The filing reports under U.S. GAAP in U.S. dollars. Its financial statements received an unqualified audit opinion.
Financial performance and liquidity
Amounts below are in U.S. dollars, in thousands, except per-share data and percentages.
| Metric | 2021 | 2020 | Change |
|---|---|---|---|
| Revenue | $4,138 | $3,868 | +7% |
| Gross profit | $2,195 | $2,444 | -10% |
| Gross margin | 53.0% | 63.1% | -10.1 percentage points |
| Operating loss | $(9,724) | $(4,142) | Loss widened |
| Net loss | $(9,895) | $(3,730) | Loss widened |
| Basic and diluted loss per share | $(0.35) | $(0.22) | Loss per share increased |
| Net cash used in operations | $(12,605) | $(3,690) | Cash use increased |
Revenue comprised systems of $1,560 (2020: $1,817), disposables of $1,208 (2020: $1,006), and exclusive distribution agreements of $1,370 (2020: $1,045). Japan revenue declined to $1,380 from $2,097, mainly because most of Terumo’s initial order was supplied in 2020. Growth in the United States, Thailand, Israel, Europe and Africa partly offset that decline.
Operating expenses rose materially: research and development to $5,877 from $3,809; sales and marketing to $1,917 from $1,063; and general and administrative to $4,125 from $1,714. Management attributed the increases to product development, added staffing and commercialization activity, and higher public-company and professional-service costs. Higher materials, subcontractor and personnel costs contributed to lower gross margin.
At year-end, cash and cash equivalents were $25,621, total current assets were $30,322, current liabilities were $4,020, and working capital was $26,302. Total liabilities were $5,323, including lease liabilities; the filing identifies no conventional borrowing outstanding at year-end. Cash flows were $3,792 provided by investing activities and $30,889 provided by financing activities, principally reflecting equity offerings. Cash and cash equivalents increased to $25,621 from $3,502. Management stated that available cash was expected to fund approximately 12 months of operations, while also anticipating substantial additional capital needs. Cash, cash equivalents and short-term deposits were $22,335 as of March 31, 2022.
Material changes, outlook and risks
- 2021 revenue growth did not keep pace with expense growth; gross margin contracted and net loss increased. Operating cash use also rose substantially.
- The January 2021 share placement raised $15 million gross. The December public offering raised approximately $17 million gross and about $15.966 million net according to the financial statements. At December 31, 2021, 35,780,335 ordinary shares and 1,034,000 pre-funded warrants were outstanding.
- U.S. clearance for malignant breast cancer treatment remained pending. IceCure had submitted FDA pre-submissions and was pursuing a 510(k) or De Novo pathway; a PMA route could take longer and cost more. Existing U.S. clearances do not authorize the requested malignant-breast indication.
- ICE3 interim results reported a 2.06% recurrence rate at approximately 34.8 months and no significant device-related adverse events; five-year patient follow-up was ongoing, with trial completion expected in 2024. Interim findings are not final clinical or regulatory evidence.
- Management expected limited release of the next-generation single-probe system and new cryoprobes by the end of 2022, and FDA and CE submissions for MultiSense in the second half of 2024. These are plans, not assured outcomes. In China, a pending amendment for commercial sale of IceSense3 disposables was expected to be evaluated by the end of 2022; a possible launch was targeted for early 2023 if approved.
- Key commercial dependencies include regulatory approvals, clinical evidence, physician adoption, distributor relationships, and reimbursement. Breast-cancer procedures were not then reimbursed by U.S. third-party payors; a CPT Category III code had been approved, but further coding and coverage work remained.
- Risks include continued losses and possible need for further financing; dependence on Terumo and other distributors; supplier concentration and rising component and shipping costs; competition; foreign-exchange exposure; COVID-related disruption; and geopolitical, regulatory, product-liability and intellectual-property risks. The company reported no material COVID-related adverse effect on 2021 financial condition or operations, but described ongoing disruption and uncertainty.
- Two Israeli class-action certification motions were disclosed: one concerning the 2021 private placement and one alleging accessibility deficiencies in electronic filings. The company stated it intended to defend the placement claim; the accessibility matter was under review. The filing does not establish their ultimate outcomes.
Important facts for investors to verify
- Confirm the requested reporting period: this filing covers fiscal 2021, not 2020 Q4.
- Reconcile the MD&A’s operating-loss discussion: its table and audited statements report a 2021 operating loss of $9.724 million, while one narrative passage says $9.895 million, the reported net loss.
- Verify December offering proceeds: one MD&A passage appears to say net proceeds were “$16.0 thousand,” whereas the cash-flow statement and equity note report approximately $15.966 million net.
- Track cash burn, liquidity runway, and the timing and dilution of any additional financing; review March 2022 cash and short-term deposits alongside the stated 12-month runway expectation.
- Monitor FDA pathway and timing for malignant breast cancer, final ICE3 follow-up, reimbursement and CPT progress, and the conditional China and product-development milestones.
- Assess revenue quality and concentration, including distribution-agreement revenue and significant customer dependence, as well as the impact of lower-margin distributor sales.