SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6 K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
EDAP TMS S.A. Files
EDAP TMS Communication with Its Investors
July 10-24, 2006
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EDAP TMS S.A. |
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Parc Activite La Poudrette Lamartine |
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4/6 Rue du Dauphine |
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69120 Vaulx-en-Velin - France |
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
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Form 20-F |
x |
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Form 40-F |
o |
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Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
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Yes |
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No |
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The Global Leader in HIFU for Localized Prostate Cancer |
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This presentation contains, in addition to historical information, forward-looking statements that involve risks and uncertainties. These include statements regarding the Company’s growth and expansion plans. Such statements are based on management’s current expectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements. Factors that may cause such a difference include, but are not limited to, those described in the Company’s filings with the Securities and Exchange Commission, including under “Forward-Looking Information”, “Risk Factors” and “Operating and Financial Review and Prospects” in the Company’s 2005 annual report on Form 20-F. |
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Philippe Chauveau
Hugues de Bantel |
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July 2006 |
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[LOGO OF EDAP TMS] |
1 |
Nasdaq : EDAP
Business
Therapeutic ultrasound
Strategy
Address growing demand for non-invasive therapies using therapeutic ultrasound based on 25 year successful track record in marketing innovative technologies
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Shares Outstanding Basic |
7.8 million |
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Shares Outstanding Diluted |
8.6 million |
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Share price as of July 3rd |
$10.25 |
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Avg. daily volume (3 months) |
146,593 shares |
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Annual revenue (12/31/05) |
$26 million |
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Cash (3/31/06) |
$9.2 million |
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Debt (12/31/05) |
$1.3 million |
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[LOGO OF EDAP TMS] |
2 |
EDAP TMS: The Global Leader in Therapeutic Ultrasound
Addressing two major pathologies in Urology:
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Prostate Cancer |
Kidney Stones |
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using HIFU |
using Lithotripsy |
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A growing market |
A stable and predictable business |
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[GRAPHIC APPEARS HERE] |
[GRAPHIC APPEARS HERE] |
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[LOGO OF EDAP TMS] |
3 |
HIFU for Localized Prostate Cancer
Prostate Gland
[GRAPHIC APPEARS HERE]
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[LOGO OF EDAP TMS] |
4 |
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Prostate Cancer: The most common male specific cancer |
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• |
238,000 new cases per year in Europe**; 231,000 in the USA* |
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• |
In Europe, 70% of new cases (160,000) are localized T1 or T2 cancer stages – HIFU candidates |
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[CHART APPEARS HERE]
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EDAP targeting 160,000+ patients in Europe Currently Treating ~ 2% (~2,800) of the target |
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The prostate cancer patient is today: |
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• |
Better educated about the risk of side effects, recurrence and operator variance in traditional therapies, |
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• |
More likely to desire a better treatment option, and |
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• |
Including Quality of Life as a primary factor in his treatment decision |
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* |
(Source: 2004 American Cancer Society) |
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** |
(Source: 2004, International Agency for Research on Prostate Cancer) |
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[LOGO OF EDAP TMS] |
5 |
Ablatherm® Brings a New Standard of Care to Prostate Cancer
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EDAP is committed to: |
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Offer patients the best combination of efficacy and safety |
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Fully enlighten patients about existing treatment options |
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Preserve patient quality of life |
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Ablatherm-HIFU is proven to: |
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• |
Provide consistently high success without operator skill variability |
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[GRAPHIC APPEARS HERE] |
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Offer lower side effects and a rapid recovery |
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Treat without precluding other therapy if cancer recurs in the future |
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Treat difficult recurrence cases often at an impasse under traditional therapies |
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[LOGO OF EDAP TMS] |
6 |
Ablatherm-HIFU a Proven Option
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• |
The recognized Global Leader in HIFU for prostate cancer |
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[GRAPHIC APPEARS HERE] |
• |
Fully Approved in Europe, Canada, Russia, Australia, South East Asia, etc. |
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More than 10,000 treatments and 105 sites worldwide |
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In excess of 100 publications and posters |
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[GRAPHIC APPEARS HERE] |
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Already reimbursed in Germany & Italy (up to €4,500) and privately in the UK (initiated at approx. £11,000), pursuing reimbursements in France and other markets |
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US FDA Trials in progress with HealthTronics |
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56 HIFU patents |
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[LOGO OF EDAP TMS] |
7 |
Ablatherm-HIFU Favorable Benefits
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[CHART APPEARS HERE] |
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Ablatherm-HIFU offers: |
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Efficacy as good as current therapies |
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Low side effect risks to the patient |
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Rapid recovery after treatment |
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Ablatherm-HIFU offers patients an opportunity to preserve their quality of life after treating prostate cancer |
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[LOGO OF EDAP TMS] |
8 |
Ablatherm®-HIFU Favorable Benefits
Favorable Disease Free Rate(*) at 5 years
for low & intermediate risk cancers
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[CHART APPEARS HERE] |
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Ablatherm-HIFU offers: |
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Predictable outcomes |
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No operator dependence |
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No impasse: repeatable |
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The patient can have confidence in HIFU as a low risk option for initial treatment |
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Once aware of HIFU, the patient can see this as a very attractive choice. |
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* Clinical disease free rate is defined as being biochemical (PSA) without evidence of disease at last follow-up. |
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Sources: Nature Clinical Practice, April 2005, Vol. 2 No.4 / Progres en Urologie (2003), 13 1428-1456, PCRI Insights Feb. 2005 Vol. 8, No. 1, Urology 2004 Feb 63(2) |
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HIFU as a robotic technique offers consistent success between users reducing operator skill concerns |
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[LOGO OF EDAP TMS] |
9 |
Ablatherm-HIFU Favorable Benefits
Ablatherm Preserves Patient Quality of Life: Lower Side Effects
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Recto-urethral fistula |
Urinary incontinence (Grade 2 to 3) |
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[CHART APPEARS HERE] |
[CHART APPEARS HERE] |
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Source: |
Sources: Complete review of NCI, |
Sexual Impotence |
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[CHART APPEARS HERE] |
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Sources: PCRI Insights Feb. 2005 |
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[LOGO OF EDAP TMS] |
10 |
Favorable HIFU Economics for Physicians and Clinics
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[CHART APPEARS HERE] |
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Ablatherm-HIFU offers*: |
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Rapid learning in just 10 sessions |
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Short treatment time increases facility efficiency |
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Fewer staff hours per session lowers personnel expenses |
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Broad indication range makes applicable to large patient population |
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Capital free RPP model offers access without financial risks |
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* |
Source: S. Thuroff, C Chaussy: Prostate Cancer Treatment Costs: What Influences Them?, EAU Poster 1036, 2006 |
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[LOGO OF EDAP TMS] |
11 |
Ablatherm-HIFU: An attractive Choice to all Parties
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Benefits to the Patients |
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Minimally invasive and proven therapy that can better preserve quality of life |
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[GRAPHICS APPEAR HERE] |
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Can enable rapid return to normal activity |
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Highly reproducible efficacy / Treatment can be repeated if needed |
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Benefits to the Surgeons |
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Minimally invasive solution that meets patient demands |
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Recapture marketshare from nonsurgical therapies (~50% of market) |
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New Gold Standard for treating radiation failures |
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Benefits to the Hospitals |
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Drive incremental patient traffic |
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Immediate return through Revenue-Per-Procedure (RPP) model |
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Benefits to the Healthcare systems |
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Lower associated costs than existing therapies, shorter hospital stay |
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Lower follow-up care required for recovery, side effects or recurrence |
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[LOGO OF EDAP TMS] |
12 |
RPP Model: The Growth Opportunity
EDAP is Transitioning from Its Straight Machine Sales Model…
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[GRAPHIC APPEARS HERE] |
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[GRAPHIC APPEARS HERE] |
Yearly Service |
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Ablatherm Unit sold |
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[GRAPHIC APPEARS HERE] |
Disposable |
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HIFU Service & Disposable Revenues (€000s) |
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Unit sales represent large revenue blocks |
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[CHART APPEARS HERE] |
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EDAP earns recurring & predictable services & disposable revenues |
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European centers have limited capital budgets |
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Centers must treat larger populations annually |
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* List price as of Dec. 31, 2005 |
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[LOGO OF EDAP TMS] |
13 |
RPP Model: The Growth Opportunity
…To Recurring Treatment Procedures Sales Model
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[GRAPHIC APPEARS HERE] |
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[GRAPHIC APPEARS HERE] |
HIFU Treatment / |
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EDAP Owns Ablatherm Unit |
[GRAPHIC APPEARS HERE] |
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Increased Use |
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Clear Returns |
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Grows Market |
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Generates Buzz |
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RPP has a higher lifetime revenue and profit potential to EDAP: |
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RPP quickly allows centers to adopt HIFU |
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RPP Treatment Revenues (€ 000s) |
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RPP removes financial risk to the center |
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RPP revenues are already accelerating from broader market penetration |
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[CHART APPEARS HERE] |
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Lower initial revenues & cash flows |
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* List price as of Dec. 31, 2005 |
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[LOGO OF EDAP TMS] |
14 |
RPP Model: Capturing the Growth Opportunity
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Expand RPP Business |
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Rapidly place more EDAP owned machines with no capital required from hospital and a clear pay back to EDAP |
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Provide support to increase use of equipment in marketplace: patient education and medical marketing |
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HIFU success measures: |
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Education: Increase Patient Demand |
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Total sites |
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Increase patient awareness driving demand (PULL) |
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Total treatments |
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Direct patients to HIFU centers in reimbursed countries |
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Create community buzz with help of media, thought leaders, advocates and word of mouth |
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Increasing sites and treatments leads to growing revenues and scalable profitability |
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Accelerate Hospital & Urologist Adoption |
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Patient demand makes HIFU a necessary offering (PUSH) |
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Further HIFU as a standard of care for first indication |
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Lock HIFU as the Gold Standard for radiation failures |
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Once available at site, grow use beyond site plans |
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[LOGO OF EDAP TMS] |
15 |
Marketing: Put the Patient in the Center of the Communication
[GRAPHICS APPEAR HERE]
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[LOGO OF EDAP TMS] |
16 |
Marketing: Unlock the Patient Demand for Better Care
[GRAPHIC APPEARS HERE]
Telling the HIFU Story to Patients
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Improve patient awareness about Quality of Life factors in treatment |
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Show patients that bloodless and radiation-free non-invasive surgery of the future is already available |
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Inform patients this new technique is the best combination of efficacy and safety |
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Explain to patients that a technique which is safe, efficient, fast, non-invasive, reliable, painless, and based on high technology is the best solution for them |
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Tell patients that treatments are increasing quickly and more centers are opening |
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Give new hope to those numerous patients with recurrence after EBRT for whom there are no salvage therapies as efficient as HIFU |
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Present complete and thorough material so patients can make a fully informed choice |
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[LOGO OF EDAP TMS] |
17 |
Marketing: Win the Medical Community with Results, Easy Access
[GRAPHIC APPEARS HERE]
Telling the HIFU Story to Medical Professionals
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Demonstrate the clinical success and confirmed low side effects in peer literature |
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Continue promoting HIFU in urology through leaders in every country |
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Further advance the medical consensus on first indication and radiation failure cases as the new standard of care |
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Promote Ablatherm within “medical standards” to create credibility and open doctor minds to a new treatment choice with real benefits |
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Continue best-in-class training program with experienced practitioner pairings to ensure rapid achievement of Ablatherm proficiency in just 10 to 12 treatments |
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Market CAPITAL-FREE launch choices removing financial risk for new clinical sites launching Ablatherm care |
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Promote the business benefits of Ablatherm in building the clinic’s patient revenues by winning incremental treatments over competing centers |
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[LOGO OF EDAP TMS] |
18 |
The Next Milestone: 5% of Targeted European Patients
European Market Scope:
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160,000 localized prostate cancer HIFU candidates diagnosed yearly |
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Growing market share builds credibility and increases demand |
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Next milestone: EDAP Ablatherm-HIFU treats 8,000 patients / year = 5% market share |
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Current run rate is 2,800 patients / year |
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New marketing and broader market penetration position EDAP to gain share |
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Straight Unit Sales Model |
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RPP Model |
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Total |
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RPP Fixed Site Model |
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RPP Mobile Sites Model |
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Targeted total cum. # of treating sites |
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60 |
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40 |
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140 |
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240 |
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Targeted total cum. # of machines |
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60 |
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40 |
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20 |
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120 |
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Targeted # of treatments / site / year |
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60 |
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40 |
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20 |
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— |
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Targeted total cum. # of treatments/yr |
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3,600 |
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1,600 |
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2,800 |
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8,000 |
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[LOGO OF EDAP TMS] |
19 |
Additional reimbursement approvals including more UK plans and the French National Health Plan are being secured. Approval of reimbursement has a demonstrated acceleration effect on treatment rates and site launches.
Launches in new markets are ongoing where Ablatherm-HIFU is approved with or without reimbursement. Recent launches have demonstrated accelerated success from EDAP’s clinical strength already proven in Europe. Increasingly, the company is using the RPP model to accelerate adoption by key thought leaders.
USA Clinical Phase II/III Studies are now in progress for future USA approval. Recruitment is ongoing at multiple sites comparing HIFU to cryo. HTRN, the largest urology services company in the USA, is conducting the studies and will have USA distribution rights upon successful FDA approval.
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[LOGO OF EDAP TMS] |
20 |
Lithotripsy: A Strong Base for Growth
EDAP TMS : A World LEADER in
NON INVASIVE
Treatment Techniques Using THERAPEUTIC ULTRASOUND
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Urinary stones |
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[GRAPHIC APPEARS HERE] |
[GRAPHIC APPEARS HERE] |
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[LOGO OF EDAP TMS] |
21 |
Lithotripsy: A Recurrent & Strong Business
Current Worldwide Installed Base > 3,000 Units
Replacement Market > 300 Units / Year @ average $250,000 (= $75M / Year)*
EDAP is a leader in Asia, including Japan, and Europe due to customer proximity and provided services
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Market Drivers: |
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Service Capacity, Credibility & Proximity |
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Technology |
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Global reach |
Predictable Service & Consumables Revenue @ 8-10% of equipment sales
Sales & Service Experience opens market to the Ablatherm-HIFU model
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* Company’s estimates |
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[LOGO OF EDAP TMS] |
22 |
Distribution of Global Lithotripsy Market:
EDAP Installed Unit Base*
[GRAPHIC APPEARS HERE]
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Global Total: |
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3000 litho units |
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EDAP Total: |
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416 litho units |
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* Company’s figures at Dec. ‘05 |
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[LOGO OF EDAP TMS] |
23 |
Financials
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[LOGO OF EDAP TMS] |
24 |
EDAP – HIFU Division: Euro 000s*
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Period |
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Revenue |
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Gross Margin |
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Op. Income |
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Q1 2006 |
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1,949 |
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56% |
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1 |
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2005 |
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7,949 |
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50% |
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135 |
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2004 |
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6,969 |
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46% |
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387 |
TMS – UDS (Lithotripsy) Division: Euro 000s*
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Period |
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Revenue |
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Gross Margin |
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Op. Income |
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Q1 2006 |
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3,863 |
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31% |
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(66) |
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2005 |
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16,154 |
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29% |
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243 |
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2004 |
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17,385 |
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30% |
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184 |
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* EDAP markets and sells Ablatherm®; TMS does all manufacturing and markets and sells Lithotripters; See 20F for complete details |
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[LOGO OF EDAP TMS] |
25 |
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Euro 000s except per share |
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Q1 2006 |
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2005 |
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2004 |
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2003 |
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INCOME STATEMENT DATA |
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Total revenues |
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5,199 |
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20,810 |
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22,163 |
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18,473 |
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Total net sales |
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5,184 |
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20,717 |
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21,955 |
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18,030 |
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Gross profit |
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2,286 |
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8,497 |
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8,487 |
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5,379 |
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Operating expenses |
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(2,770 |
) |
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(9,820 |
) |
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(9,317 |
) |
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(13,500 |
) |
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Loss from operations |
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(484 |
) |
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(1,323 |
) |
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(830 |
) |
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(8,121 |
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Income (loss) before income taxes |
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(546 |
) |
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(961 |
) |
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(871 |
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(9,090 |
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Income tax (expense) benefit |
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(77 |
) |
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(104 |
) |
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(278 |
) |
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114 |
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Net income (loss) |
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(623 |
) |
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(1,065 |
) |
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(1,149 |
) |
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(8,976 |
) |
|
Basic earnings (loss) per share |
|
|
(0.08 |
) |
|
(0.14 |
) |
|
(0.15 |
) |
|
(1.15 |
) |
|
Weighted average basic shares |
|
|
7,823,331 |
|
|
7,782,731 |
|
|
7,781,731 |
|
|
7,781,731 |
|
|
Weighted average diluted shares |
|
|
8,608,255 |
|
|
8,373,574 |
|
|
8,074,210 |
|
|
7,817,303 |
|
|
[LOGO OF EDAP TMS] |
26 |
|
Euro 000s |
|
March 31, |
|
December 31, |
|
||
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and short term investments |
|
|
7,591 |
|
|
8,317 |
|
|
Total current assets |
|
|
21,846 |
|
|
22,034 |
|
|
Total current liabilities |
|
|
9,675 |
|
|
9,557 |
|
|
Shareholders’ Equity |
|
|
16,871 |
|
|
17,372 |
|
|
[LOGO OF EDAP TMS] |
27 |
|
• |
Grow HIFU business by deploying infrastructure for the RPP model facilitating access to Ablatherm-HIFU therapy at centers of excellence and regional centers in Europe |
|
|
|
|
• |
Develop dedicated PR programs for each major site (sold or RPP) to assist hospitals and surgeons in the promotion of the Ablatherm-HIFU |
|
|
|
|
• |
Dramatically increase patient awareness on the compelling benefits of Ablatherm-HIFU by rolling out an aggressive marketing campaign in Europe |
|
|
|
|
• |
Add to long-term clinical studies and publications to further broaden the adoption of Ablatherm-HIFU by the medical community, approval authorities and reimbursement officials in major markets |
|
|
|
|
• |
Further refine Ablatherm-HIFU applied to prostate cancer constantly striving at enhancing patient quality of life |
|
|
|
|
• |
Further expand EDAP’s HIFU product portfolio and IP in prostate cancer and other pathologies |
|
[LOGO OF EDAP TMS] |
28 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
Date : July 25, 2006 |
|
EDAP TMS S.A. |
|
|
|
|
|
|
|
|
|
|
|
/s/ HUGUES DE BANTEL |
|
|
|
|
|
|
|
HUGUES DE BANTEL |
|
|
|
CHIEF EXECUTIVE OFFICER |