Edap Tms SA (EDAP) 2010 Q3 法說會逐字稿

Greetings. And welcome to the EDAP third quarter 2010 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. (Operator Instructions). As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Ms. Carol Ruth of The Ruth Group. Thank you. Ms. Ruth, you may begin.

Thank you, operator. With us today from management are Philippe Chauveau, Chairman of the Board; Marc Oczachowski, Chief Executive Officer; and Eric Soyer, Chief Financial Officer.

Before we begin, I'd like to remind everyone that management's remarks today may contain forward-looking statements. 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 from those described in these 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 & Exchange Commission.

Now, I'd like to turn the call over to Mr. Philippe Chauveau. Philippe?

Good morning, everyone. I will be very brief in my opening remarks. The EDAP team is focused on advancing Ablatherm-HIFU as the preferred treatment option for localized prostate cancer under the current treatment paradigm and also, very importantly, under the focal therapy paradigm.

We are also leveraging opportunities across our Ablatherm-HIFU and lithotripsy device portfolios, and we have strengthened our backlog as we enter the second half of the fourth quarter; traditionally, a strong capital equipment market for us.

In Q4, we have a strong and varied pipeline. [Regarding] Q4, I wish to share four points with you; one, EDAP is addressing cancer drug delivery combined to HIFU; two, EDAP is addressing liver cancer; three, EDAP is entering the fast-growing China market; and finally, point four, EDAP plans to implement robust cost reduction initiatives.

Let me now hand over the call to Marc.

Thank you, Philippe. And thank you, everyone, for joining us on our third quarter 2010 earnings call. During today's call, I will discuss some of our recent developments; cover the highlights from our third quarter results; and review our future outlook.

Before reviewing the performance of the business and the milestones we have achieved, and will continue to [advent], I want to emphasize the initiatives we are taking internally to realign our operational costs in order to quickly drive the Company to profitability.

While we recognize the importance of continuing growth on the top line and driving device and [products] on our state-of-the-art technology, we believe it is an important time to diligently review our cost base and improve our bottom line. You can expect that we will be aggressive in this regard. In order to achieve our goal, we are currently designing an aggressive plan and we will execute it in a very timely fashion.

The population of prostate cancer patients treated successfully with Ablatherm-HIFU is now significant with more than 25,000 treatments. This population was highlighted in the publication of the largest long-term data for Ablatherm-HIFU. The study, carried out by Dr. Sebastien Crouzet, Urologist at Edouard Herriot Hospital in Lyon, France, demonstrated the durability of efficacy outcomes and great stability of robotic Ablatherm-HIFU in the treatment of localized prostate cancer. It included 803 patients with localized prostate cancer treated with Ablatherm-HIFU from 1993 until 2007.

We anticipate that this long term and positive diversification, along with others in the coming quarters, will be included as a strong support in the data set that we expect to submit to the US FDA in the second half of 2012.

We continue to actively work on the HIFU registry so that we will be able to bring additional long-term results, with an even larger cohort of patients. This is a significant milestone in the adoption process of the technology and treatment modality at HIFU.

After so many years of investigations, we are now about to release long-term data. We believe this data will underscore the success of our treatment and support the broader access to HIFU by the majority of urologists, resulting in Ablatherm moving to the next level of users from the early adopters of pioneers.

Now let me address the focal therapy opportunity. We continue to focus on positioning Ablatherm-HIFU at the forefront of the focal therapy approach as the treatment paradigm shift for prostate cancer continues to evolve.

The international urology community is continuing to work on the definition of this new strategy of treatment as experts agree that this will be the next [healthcare] strategy to treat prostate cancer. Indeed, the focal approach answers perfectly the need of both the urologists and the patients as it is designed to give a strong and strict control of the disease with a very high preservation of patient quality of life.

The unique features and advantages of Ablatherm-HIFU that is providing an effective and accurate ablative treatment with its capacities of being flexible and repeatable are positioning the HIFU option as the best answer to the focal strategy of treatment.

[We also] believe that EDAP, as the leading HIFU company worldwide in the treatment of prostate cancer, has a huge and unique opportunity. We will be at the forefront of new treatment options and position HIFU as the first [talon of care] treatment for focal.

The French Urology Society has already taken the lead in conducting focal therapy trials utilizing EDAP's Ablatherm-HIFU to evaluate the therapy.

Let me address other opportunities for HIFU beyond prostate cancer. Leveraging our technology platform, and in order to keep HIFU leadership also beyond prostate cancer, we have entered into two collaborations to evaluate the implication of HIFU technology on other indications.

The first collaboration with Lyon-based center Leon-Berard, the French healthcare research organization, INSERM, is focused on evaluation our technology as a potential treatment for metastatic liver cancer. The first phase of the clinical protocol was completed in six patients with metastatic liver cancer. Clinical results observed fully conformed with those obtained in pre-clinical studies and validated HIFU as being an additional potential option to address liver metastases.

The clinical teams are planning to enter a second clinical phase that will include a larger number of patients to move further into the validation of the benefits of HIFU for this liver application. The second collaboration, with Epitarget AS, in turn is aimed at improving delivery of cancer drugs using the combination of ultrasound-sensitive liposomes and EDAP HIFU technology.

A feasibility study was successfully completed and confirmed that HIFU activates the encapsulated cancer drug after accumulation in solid tumors. This innovative approach is intended to target delivery of the cancer drug in solid tumors and potentially reduce the toxicity of systemic delivery associated with traditional chemotherapy.

Now, let me address one of our recent business expansions. There is no doubt that China is recognized as the fastest-growing healthcare market in the world and it was a strategy of EDAP's to access this market through a distribution agreement.

In August, we entered into an exclusive distribution agreement with Shaw Han Biomedical Company to pursue the regulatory and marketing process for Ablatherm-HIFU device. We showcased our state-of-the-art HIFU and lithotripsy technology at the Asian conference of urology in late August in Taipei. We will continue to report on that progress in this exciting market.

Turning now to our lithotripsy business, we are pleased with the strong reception that our expanded technologically-advanced product portfolio is receiving in Europe and other international markets. We recorded a solid level of sales in Q3 with 10 [machines], and we currently have a strong backlog of lithotripsy machines for Q4, which now includes 13 lithotripsy systems.

In line with our strategy to increase our market share in what is one of the largest lithotripsy markets, [we strengthened] sales force in Japan by adding two senior sales professionals, bringing the total number of direct sales representatives in Japan to nine, [in order] to take market share from the competition in the [reputation-driven] market.

Following regulatory approval earlier this year, our first Sonolith i-sys was installed in Japan at the Hitachi Naka Hospital, and received a strong endorsement from its urology department. We then installed a second Sonolith i-sys unit in September, and our team is working on a strong pipeline of projects for Q4.

Now, for the third quarter, we generated total revenues of EUR5.3 million, or $7 million. This represents an increase of 15.5% of our revenues, as compared with Q3 last year.

We sold 10 lithotripsy machines during the quarter, which represents a great conversion of the backlog machines that we highlighted in August. This is good news as the beginning of 2010 was, as announced, a little bit slow in capital equipment expenditures in the healthcare and device market.

As we know and recorded the previous year, the sales of medical devices are very seasonal and many hospitals and physicians typically wait to spend their capital budgets until late in the year. And this year, the seasonality is compounded by the weak economic environment.

We continue to be very enthusiastic, and we have now built a strong backlog of 13 lithotripsy machines and two Ablatherm devices, and we continue to have a great pipeline of projects. With six weeks remaining in the fourth quarter, we are diligently working on converting the leads to purchase orders, to delivered sales.

I will now turn the call over the Eric, who will review our third quarter 2010 financials in greater detail. Eric?

Thank you, Marc. And good morning, everyone. I will now take a few minutes to review our third quarter financial results. The results reflected the continued weakness in the global economic environment and the subsequent slowdown in hospital spending.

Total revenue for the third quarter 2010 were EUR5.3 million, or $7 million, an increase of 15.5%, as compared to EUR4.6 million, or $6.7 million, from the third quarter of 2009. Total revenue for the HIFU division was EUR1.4 million, or $1.9 million, for third quarter of 2010, compared to EUR2.1 million, or $3 million, for the same period last year.

The results for the third quarter 2010 reflected no Ablatherm-HIFU device sale and increased net sales of spare parts and services.

For the three months ended September 30, 2010, total revenues for the lithotripsy division was EUR3.9 million, or $5.2 million, compared to EUR2.5 million, or $3.6 million, during the year ago period. During the third quarter 2010, we recorded sales of 10 lithotripsy machines, including three Sonolith i-sys devices and four Sonolith i-move devices.

Our gross profit for the third quarter 2010 was EUR2.2 million, or $2.9 million, compared to EUR1.7 million, or $2.4 million, for the year ago period. Gross profit margin was 41.6% in the third quarter 2010, an increase of 5 points, as compared to 36.7% in the year ago period.

Operating expenses were EUR3 million, or $4.million, for the third quarter 2010, compared to EUR3.2 million, or $4.6 million, for the same period 2009. Third quarter 2010 operating expenses included EUR393,000, or $516,000, related to the US FDA ENLIGHT clinical trial for Ablatherm-HIFU, down by 42% on a sequential quarter basis from EUR674,000, or $891,000, in the second quarter 2010.

As expected, with the completion of the recruitment and treatment phase in June this year, trial expenses have started to shrink in the third quarter and during the follow-up phase.

Operating loss was EUR797,000, or $1 million, for the third quarter 2010, compared to EUR1.5 million, or $2.2 million, for the year ago period. Excluding US FDA trial expenses, third quarter 2010 operating loss was EUR404,000, or $530,000.

Net loss for the third quarter 2010 was EUR1.9 million, or $2.5 million, or EUR0.17 per diluted share, compared to a net loss of EUR5.8 million, or $8.3 million, or EUR0.55 per diluted share in the year ago period. The third quarter 2010 net loss included a non-cash interest expense of EUR250,000 (sic - see Press Release), or $282,000 (sic - see Press Release), to adjust the Company's convertible debt and outstanding warrants to fair value, compared to a EUR4 million, or $5.7 million, non-cash expense during the same prior year.

At September 30, 2010, cash and cash equivalents including short-term treasury investments were at EUR8 million, or $10.9 million.

In the third quarter, we deployed approximately EUR1.8 million, or $2.4 million, in working capital to replenish our device inventories in anticipation of sales in the fourth quarter 2010.

We are well positioned to take advantage of the sales opportunities towards the end of the year, as we currently have 13 lithotripsy and two Ablatherm devices in our backlog, and continue to cultivate a strong pipeline.

With that, I will turn the call back to the operator, who will open the line for questions. Operator?

Thank you, sir. Ladies and gentlemen, at this time we will be conducting a question and answer session. (Operator Instructions). Our first question today comes from the line of Bruce Jackson with Morgan Joseph. Please proceed with your question.

Good morning.

Good morning, Bruce.

Good morning, Bruce.

First, I wanted to know if there was any change in the number of sites using HIFU.

No. So far, no. We are continuing to recruit some new sites. But we don't have the exact number for that, but the number of sites is continuing to increase as we move forward.

Okay. And then with the backlog moving up, how would you anticipate that being converted into revenue? Do you think that'll take place in the fourth quarter? Or is it something that takes place over the span of several quarters?

Most of our backlog is normally converted into sales into the same quarter. What we call backlog, again, is confirmed purchase orders with secured payments. So, usually, we are able to deliver the backlog within the quarter.

Okay. And then in Japan, you've added a couple of sales reps, when do you think you might see some acceleration in the revenue in Japan?

Well, that will be probably something we might see next year, and with the addition as well that -- to the fact that we are also processing the approval process of [our new Sonolith i-sys] in Japan and we are expecting to get that in the mid of next year. So this, combined with the two new sales guys and the recently approved Sonolith i-sys, may definitely have some impact in next year's sales.

Okay, great. And then, in China, you mentioned that you needed to obtain regulatory approval for the instruments; when do you anticipate getting regulatory approval in China?

Well, we won't give too much detail and forward-looking statements on that as the regulatory environment in China is evolving quite fast and changing a lot. But, basically, we expect a period of time between probably 18 months to 24 months of regulatory process.

Okay. And then finally --

(multiple speakers).

Pardon me?

This is something that could change as well as the market. The regulatory processes in China are changing quite a lot in the past -- have changed quite a lot in the past few weeks and may change again.

Okay. And then finally, if could you talk about the balancing; the development of the two new programs and funding that versus the cost cutting initiatives and how you're going to balance those two things.

Well, actually, we obviously try to maintain our investment in R&D. And on the specific programs that are still in the so-called early stage, Phase I or feasibility studies, the cost is not that high here in Europe and in France. And we are also benefiting from some subsidies here to run those programs.

So, for the time being, they won't be very costly programs, which will definitely help to move forward in the research and development of these applications.

Okay, great. Thank you very much.

You're welcome, Bruce.

Thank you. Our next question comes from the line of Suraj Kalia from Rodman & Renshaw. Please proceed with your question.

Good morning, Marc. Good morning, Eric.

Good morning, Suraj.

Good morning, Suraj.

Congrats on the quarter, first. Marc, in view of the US ENLIGHT trial, could you just shed some color in terms of the progression over 2011, specifically related to cost, and enrolment, and milestones, and so on and so forth?

Yes, actually, in 2011, it will be purely a follow-up phase on the trial. And as we announced, and as most of you know, the most costly part of the trial is the enrolment phase. And that is done now; the enrolment was concluded in June this year.

So, for 2011, the cost of the clinical trial will be only related to the follow-up phase, and that will certainly be much lower than what it was in 2010 and '09.

Should we expect it to be at the same level -- can you give us directionally? I'm not asking for guidance.

No, no, it should be lower.

In terms of cost cutting and the trial costs over 2010, what levels are you expecting to, should I say, reduce our professional burden?

Well, first, we're actually in the middle of this program. And every area that may be for the R&D effort but is a matter of examination and nothing is excluded at this stage.

It's difficult to give you a specific target in terms of numbers. But again, the goal is to lower the Company's break-even point today, both to whether any further economic [venture] and possibly to reach profitability quicker. So that's something we want to achieve as quickly as possible and we will enter in this cost cutting program in the coming, I should say days and weeks. But at this stage, it's not possible for us to give you a specific number.

And, Marc, just some industry-related questions. In Europe, for delivery of oncology compounds, you mentioned use of HIFU for localized delivery of some of these compounds; what are you seeing in the market? Who are the key players that strategically, while looking inside, you say this is the technology where we have to go head-to-head and either prove we are non-inferior, or superior for that matter?

I didn't understand the point of your question. You ask about the potential of market for drug deliveries or --? I didn't get your point.

Well, for delivery of some of these compounds using HIFU, what other technologies are you seeing in the marketplace that have either a good footing or a good expectation from players that this is going to assist in delivery of oncology compounds, and when you look at HIFU you'll say these are the other technologies that are either well entrenched or on the horizon and we have to compete against and show non-inferiority or superiority to?

What are the benchmarks you are using for HIFU assisted delivery of some of these compounds?

As far as we know, Suraj, there is a great number of research on the different manners to improve drug delivery. There are some other companies who are looking at drug delivery which is assisted, for example, by ultrasound as well but using the (inaudible) effect of ultrasound. This is not the case with our technology. We're using specific liposomes which are ultrasound sensitive, and which does deliver very high frequency ultrasounds that do not actually heat the tissues, and that's the main difference.

And we believe that's a good approach because then we don't have any damaging effects due to the heat of the ultrasound but just open, so to speak, the liposomes using some other physic features of ultrasound. And we believe that's a very interesting approach that answers the issue that other companies have faced so far with their heating problem of other techniques.

Okay. And finally, Marc, in terms of after the September publication for Ablatherm, what has been the feedback in the field, or the kind of reception you'll have gotten? As you look at that data and try to present it from a marketing perspective and a sales perspective, what has been the reception of physicians when you look at that data? Has there been any follow through in terms of increased uptake, increased interest, where earlier centers were not considering HIFU and now they're saying, well, now we'll look at it?

Right, this publication was definitely a step forward. But again, we need to bring, and that's what we are doing via the [registry], more patients and more centers. And this publication was showing long-term reserves but from only one center in Lyon, and we are now building some more publications based on more centers and on the larger quota of patients and on some more long-terms as well. So, that was a first step, and that was very well received.

Okay. Gentlemen, thank you for taking my questions.

Thank you, Suraj.

Thank you, Suraj.

Thank you. Ladies and gentlemen, our next question comes from the line of Jonathan Schwartz with Deerfield. Please proceed with your question.

Good afternoon, Marc and Eric. And congratulations on all of these initiatives. I have a few questions about the Norwegian joint venture. I wonder, what type of cancer cells was this tested on; were they pancreas, renal, liver? Where was the tumor located? And was only the drug Doxarubicin used? Or were other drugs used? And the last piece of that is, if that's the case, if there was just one drug, is there any reason why other drugs couldn't be used with liposomes in this system?

This technique is to target solid tumors, but we didn't see it [done any patients] on that and we are again working on the feasibility phase of such a [acquisition] and combination. So we didn't target yet any organs [at the time].

Right.

But the idea is, again, to target solid tumors that can be different types of cancers and organs.

So could it be any type of cancer, Marc? Could it be pancreas, liver, renal, potentially brain; any type of tumor? Or is there --?

The type of cancer is driven by the type of liposomes that you are able to design. So far, the company we're working with on designing liposomes has [designed] liposomes to be targeted on breast cancer. But that's their call, that's their expertise to design some other type of similar type of liposomes that could address other organs.

So, they started with breast cancer?

What we do is to partner with them and make sure that the liposomes they can design can be activated by our ultrasound technology.

And did they start with -- did I get that right, Marc, that they started with breast cancer?

That's not the first experience of the British company we're working with. But we didn't do any patients; that was a biochemical-type of expertise.

I see, okay. And we're partnering with them presumably because they have great expertise in this area?

Exactly.

Right. Let's see. So, am I correct then that this is used primarily or exclusively with chemo? So, were you doing chemotherapy? Maybe this is chemotherapy; I'm ignorant about this area, so is this a form of chemotherapy then?

Absolutely.

It is, yes.

The chemotherapy with the idea, again, of targeting the organ instead of delivering the chemotherapy everywhere, so that's a targeted and focused type of chemotherapy.

And by encapsulating the drug in liposomes where there's no HIFU, where HIFU doesn't activate it, is there any leakage of the drug into the system? Is there none? Or is there very little? Or do we know the answer to that yet?

None.

None?

No. The idea is really to have the active drug to be encapsulated into the liposome and just to be released once the liposome has reached the targeted tumor.

And does the -- is there reason to believe then, I guess maybe it's too early to tell, that the liposomes would then also accumulate in other organs? But they'd be benign because they wouldn't have any effect, but they would do that, presumably? If you were targeting kidneys, then the liposomes would also accumulate maybe in the pancreas, but it wouldn't matter because that wouldn't be targeted by the HIFU; do I have that right?

That's the principle, yes. The principle is to get the effect only where HIFU is used and direct it to so that we can activate the liposome. And once the -- if the liposome is not activated, there is no release of the drug.

Is HIFU applied internally or externally for this?

Externally.

Externally. And was the research pretty much financed by grants?

So far, yes.

Yes. And were they INSERM grants, or were they Norwegian grants?

Well, they were French government grants that benefited both INSERM and EDAP.

Right, understand. And was the research done in France, or in Norway?

Well, both, since there are two stages and two different areas of research. There is research on HIFU activation, this is done in France between EDAP and INSERM, and then there's the research on the liposomes, which is done in Norway.

Right. So what's the next step then after the feasibility study on the drug delivery program? At what point do we get to the stage of human trials? Are we far away from that?

It's a bit early to say, so we will report as we progress on this because there is some technical license to be achieved by then.

I see, okay. So, let's see. And in the area focal therapy, could you just give us a little bit more color on -- my recollection is that there were some small scale trials going on in France, and possibly in Belgium. Is that right, for focal?

There is a trial that was initiated by the French Urology Institution in France and that's a study that is comparing focal HIFU to active (inaudible).

And as far as Belgium is concerned, there is no trial going on but there are some users. And among our 250 other users [focused in] there, more and more users that are trying in the hospital and they are using HIFU as a focal treatment for their patient, but they are not part of an official trial.

250 users?

The idea would be to further work on trials and more international trials, including some European sites and maybe some US sites as well.

So, but 250 users, is this being done in a number of countries then?

Yes. 250 users are the number of users using the Ablatherm-HIFU, and some of them are now switching to focal HIFU or using, in some cases, HIFU on the focal strategy base.

So, if I have a friend, which I do, who might be interested in this, this isn't the [forum], I can talk to you another time, but you could -- there are doctors in France, and possibly elsewhere in Europe, who would actually provide this focal therapy now? Is that --?

Absolutely.

Yes, great, okay. Well, thank you very much. Thanks for the answers to all these questions, appreciate it.

Thank you, Jonathan.

Thank you, Jonathan.

Thank you. Our next question comes from the line of [Mark Windling] with Paulson Investments. Please proceed with your question.

Good afternoon, gentlemen.

Hello, Mark.

Actually, I've got a couple of questions; they're brief. First, do you have any explanation for the fact that your capitalization's just about doubled in a few days.

Well, it's always difficult to make an interpretation on market variation. But as the market's just [recalled], we have made some -- a number of releases in the recent past that truly show you that important progress and the achievements of important milestones.

We have been discussing the trend of focal therapy, and this is obviously a major one. Again, and as Marc has already explained, this is a new paradigm in the management of prostate cancer and this has positioned EDAP at the forefront of the technology to address the disease.

We've been discussing, just now, the achievements of the technology beyond prostate cancer. We have informed the market recently about the progress on liver metastases or drug delivery, and that also shows the Company's ability to deploy its technology know-how to other areas. And we can also think about the -- our initiatives to address the Chinese markets, or to strengthen our position in Japan.

So, I believe all that start to be recognized in the market. And I guess the investment community has got to see the full potential [we have], and I tend to believe that it somehow starts to reflect in the Company's stock price.

Well, it's encouraging to see that. I'm glad to see that. The second question leads to I believe it's next year that the bonds that you have are coming due; as the registration of the shelf offering, what your intent will be as far as the repayment of those bonds?

Well, no. Well, actually, the bonds are due two years from now, that will be in October 2012, so we still have time to see how the Company makes progress and what will be the ultimate solution to these [bonds].

The shelf was too -- was made and meant to seize any opportunities. Again, we have some good operational achievements. There is this [trend in] focal therapy that we want to beat a little bit and position the Company at the forefront of the trend, so the shelf is definitely -- it needs to be ready to seize any potential and positive opportunity for the Company.

So, essentially, it'll be used exclusively as a means for growing the Company then?

Well, we will see that. But that will be used mainly to make some progress on the operational side, and mainly on focal therapy as this is the next and major opportunity we have for the Company.

Okay. Well, thank you; that's all I've got today.

Thank you, Mark.

Thank you. Ladies and gentlemen, our next question comes from the line of Robert Chung with Hedgehog Capital. Please proceed with your question.

Hi. Thanks for taking my call. Just a couple of quick questions. Regarding HIFU treatments in China, I'm not familiar with the extent of healthcare coverage I guess in China; from the patient's perspective, is that something that's typically paid out of pock by the patient? Or is there insurance coverage there?

For private patient, actually today it's paid out of pocket; and for public patients, it's obviously paid by the government and the hospital. But this may change again as we are now in the regulatory process. And we entered the process with our partner in China for, first, getting there the HIFU approved, and then we commercialize it.

Okay. So, is that -- when you say public and private, I guess how is that determined at that point?

Well, public hospitals and private hospitals.

Okay, got you, okay. So, public patients will be covered by the government in this case?

Yes.

Okay. And then I guess switching gears, relating to the convertible bonds, just wondering if you've had a -- how many bonds are still upstanding at this point? Has that number changed since the last quarter?

Well, no; the amount in dollar is $15.6 million.

Okay, great. Thank you very much.

Thank you, Robert.

Thank you. (Operator Instructions). Our next question comes from the line of Jonathan Schwartz with Deerfield. Please proceed with your question.

Marc, just one. I was going to ask you about one of these questions, but that's already been answered. But the other one is what's the status of HIFU in China? I know that China Med, or the people that they sold their HIFU business to, use an external system, but I didn't -- is there any treatment at the moment of prostate cancer in China available? What's the status of availability of HIFU for prostate cancer in China now?

Well, no, there's a Chinese company that are doing extra HIFU; are not targeting prostate cancer, but they treat other organs. And this is one of the main reasons from the [external] approach prostate is not as well targeted; the best approach for prostate is via the rectum of the patient. But they are doing HIFU with other applications.

So, there's currently no HIFU for prostate cancer in China available, is that right?

Yes, probably right. I don't exactly know the status of the approval of the other [androecial] HIFU device.

I see, okay. But in any case, the only potential competition that we might have in China would be the other, the Sonablate, is that right?

For prostate cancer, yes.

Great. Thank you. Thanks very much.

You're welcome.

Thank you, ladies and gentlemen. We have no further questions at this time. I'd like to turn the floor back to Mr. Philippe Chauveau.

There being no more questions, I am bringing this Q3 conference call to a close and wish to thank you all for your participation. Thank you again, and goodbye.

Ladies and gentlemen, this concludes today's conference. You may disconnect your lines at this time, and thank you for your participation.