IceCure to build on impressive breast cancer trial results

IceCure Photo: PR

The company must still show that its cryoablation method for removing tumors achieves better results than conventional surgery.

The share price of medical company IceCure Ltd. (TASE: ICCM) over the past two trading days after soaring nearly 300% in the two trading days preceding that, following its report of the result of a trial in freezing malignant breast tumors. The share surged 137% on Sunday alone following the announcement of the trial results, and added 70% to its value Monday, driving the company's market cap up to nearly NIS 150 million.

IceCure reported success in a trial testing the effectiveness and safety of its product to remove malignant tumors. The trial was conducted on 146 early-stage breast cancer patients with small tumors that can be removed using IceCure's system. No significant complications were observed in the trial. The patients resumed activity within 48 hours, and 95% of them reported satisfaction with the cosmetic result. The treatment took 20-40 minutes in a non-hospital clinic, in contrast to the existing treatment for small tumors, which involve hospitalization and surgery with anesthesia, while the cosmetic result is sometimes less than satisfactory.

The previous surge did not last

In mid-2013, when IceCure was still focusing on benign tumors, its share price leaped 300% after the company announced that it had obtained insurance coverage from a US company and that it had obtained an investment from a group of Israeli businesspeople seeking to distribute its product in Russia. The share eventually reverted to its previous level, but the money raised enabled IceCure to survive two tough years until its current controlling shareholder, Haixiang Lee of China, invested in the company three years ago.

IceCure is developing a system for using freezing benign and malignant tumors (cryoablation). Its current target market is breast tumors. IceCure began penetrating the market in treatment of benign tumors several years ago, because this market was more accessible than the market in treatment of malignant breast tumors.

Insurance concerns, however, do not regard removal of benign tumors as an urgent medical need, and the company therefore had difficulty in obtaining indemnity for its product. IceCure's revenue averaged NIS 2-3 million annually, with losses in the NIS 9-12 million range, putting the company under budgetary pressure. The parties at interest that brought the company to the TASE in 2011 (Giza Venture Capital, Docor, XT Investments (controlled by Ofer Brothers), and Bridge Investments), as well as former CEO Hezi Himelfarb, lost interest and gradually left the company in the years following its IPO.

In 2015, Haixiang, a businessperson with connections in the Chinese medical market, invested $5 million in IceCure, which was in dire cash flow straits, and achieved a 60% return on the shares. A year ago, when the company's market cap was only NIS 24 million, Xaixiang announced his intention of making an offer to purchase for IceCure shares at half of today's price, which was double the company's share price at the time. The investors in IceCure, however, did not accept the offer. HaiXiang eventually lent the company $500,000 at a US bond interest rate to keep it afloat, after which rights were issued, increasing his stake in IceCure to 67% of its shares.

Two years ago, Haixiang appointed Eyal Shamir, who acquired a good reputation when he worked at Hanita Lenses, sold in 2016, as CEO of IceCure. IceCure's chairperson is former Teva Israel CEO Ron Mayron. The company's new management decided to emphasize treatment of malignant breast tumors. In contrast to benign breast tumors, malignant breast tumors must be removed, and it is clear that the health system has to pay for it. IceCure's challenge now is to prove that its method is better than the existing method for removing the tumor, which is conventional surgery.

The challenge is educating the market about the new product

IceCure's approach to removing tumors is called cryoablation - freezing the tumor. Those familiar with the medical field may remember Galil Medical, which developed cryoablation devices and focused on removal of prostate tumors. Galil Medical's success was only moderate because of the competition in the market and technical problems with the product, which IceCure is attempting to solve. For example, Galil Medical's device was physically very large, the surgery was relatively long, and the gases used by the company for freezing were expensive. IceCure claims that it has advantages in all of these areas.

One US company has also developed cryoablation for destroying breast tumors, but it has only begun a clinical trial and has not recruited many patients, so it does not really pose a threat to IceCure. On the other hand, the other company is not of much use in educating the market, either. Educating the market about a change in medical treatment and adopting a new treatment is a difficult challenge; the history of both IceCure and the entire Israeli medical devices sector shows that the challenge is particularly great for Israeli companies in the US market.

IceCure's current trial shows that its product is safe to use and really removes a tumor without recurrence, but this does not yet show that the treatment achieves better results than conventional surgery. One interesting opportunity could be a company in for removal of lung tumors. It is difficult to penetrate the lungs in surgery, and alternative methods could therefore be of interest to the market.

Published by Globes [online], Israel business news - www.globes-online.com - on May 9, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

IceCure Photo: PR
IceCure Photo: PR
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