PROCEPT BioRobotics Corporation (PRCT): Business Model Canvas [10-2024 Updated]

Discover how PROCEPT BioRobotics Corporation (PRCT) is revolutionizing the treatment of Benign Prostatic Hyperplasia (BPH) with its innovative business model. By leveraging advanced robotics and clinical evidence, PRCT is not just creating minimally invasive treatment options but also establishing strong partnerships with healthcare providers and urologists. Dive into the intricacies of their business model canvas to see how they drive value through cutting-edge technology and strategic collaborations.

PROCEPT BioRobotics Corporation (PRCT) - Business Model: Key Partnerships

Collaborations with healthcare providers

PROCEPT BioRobotics collaborates with various healthcare providers to enhance the adoption of its robotic surgical systems. These partnerships are crucial in demonstrating the efficacy and safety of the AquaBeam and HYDROS Robotic Systems in clinical settings. In the United States, revenue from system sales and rentals increased to $50.978 million for the nine months ended September 30, 2024, compared to $37.065 million for the same period in 2023, indicating a strong market demand driven by these collaborations.

Relationships with key opinion leaders in urology

Key Opinion Leaders (KOLs) in urology play a significant role in promoting the use of Aquablation therapy. PROCEPT BioRobotics has established relationships with KOLs who provide clinical insights and support for the technology. This collaboration has led to Aquablation therapy being included in clinical guidelines from professional associations such as the American Urological Association. The company has built a network of approximately 150 peer-reviewed publications supporting Aquablation therapy, which has been instrumental in gaining acceptance among healthcare professionals.

Partnerships with third-party payors for reimbursement

PROCEPT BioRobotics actively engages with third-party payors to secure reimbursement for its innovative procedures. These partnerships are essential for facilitating patient access to Aquablation therapy. As of September 30, 2024, the company reported a total revenue of $156.262 million, a significant increase from $92.610 million in the previous year, partly attributed to successful reimbursement agreements.

Partnership Type	Details	Impact on Revenue
Healthcare Providers	Collaborations to demonstrate efficacy and safety of robotic systems	$50.978 million (9M 2024) vs. $37.065 million (9M 2023)
Key Opinion Leaders	Established relationships promoting Aquablation therapy	150 peer-reviewed publications supporting therapy
Third-Party Payors	Engagement for reimbursement agreements	$156.262 million (total revenue 9M 2024)

PROCEPT BioRobotics Corporation (PRCT) - Business Model: Key Activities

Manufacturing of robotic systems and disposable handpieces

PROCEPT BioRobotics manufactures the AquaBeam Robotic System and the HYDROS Robotic System, which are designed for minimally invasive urologic surgery. As of September 30, 2024, the company had an install base of 572 robotic systems globally, with 445 located in the United States. The manufacturing facility is located in San Jose, California, where the company produces robotic systems and associated disposable handpieces.

The revenue from system sales and rentals for the three months ended September 30, 2024, was $19.6 million, compared to $13.5 million in the same period for 2023. For the nine months ended September 30, 2024, revenue from system sales was $51.0 million, up from $37.1 million year-over-year.

Conducting clinical trials to validate technology

Clinical trials play a critical role in validating the technology behind PROCEPT's products. The pivotal WATER study, which is the only FDA pivotal study randomized against traditional transurethral resection of the prostate (TURP), demonstrated superior safety and non-inferior efficacy for Aquablation therapy across various prostate sizes. The study's outcomes have contributed to the acceptance of Aquablation therapy within clinical guidelines by professional associations, including the American Urological Association.

As of September 30, 2024, the company had significant investments in research and development (R&D), totaling $16.6 million for the three months ended September 30, 2024, representing a 44% increase compared to $11.6 million in the same period of 2023. For the nine months ended September 30, 2024, R&D expenses were $47.2 million, up from $34.0 million.

Sales and marketing to drive adoption of Aquablation therapy

Sales and marketing efforts are essential for driving the adoption of Aquablation therapy. For the three months ended September 30, 2024, PROCEPT reported selling, general and administrative (SG&A) expenses of $42.7 million, a 30% increase from $32.9 million in the same period for 2023. For the nine months ended September 30, 2024, SG&A expenses totaled $123.1 million, up from $95.5 million.

The company also reported total revenue of $58.4 million for the three months ended September 30, 2024, a 66% increase from $35.1 million in the same period of 2023. For the nine months ended September 30, 2024, total revenue was $156.3 million, a 69% increase from $92.6 million.

Key Activity	Details	Financial Impact
Manufacturing	Production of AquaBeam and HYDROS systems in San Jose, CA	Revenue from system sales: $19.6M (Q3 2024)
Clinical Trials	Pivotal WATER study validating Aquablation therapy	R&D Expenses: $16.6M (Q3 2024)
Sales and Marketing	Driving adoption of Aquablation therapy	SG&A Expenses: $42.7M (Q3 2024)

PROCEPT BioRobotics Corporation (PRCT) - Business Model: Key Resources

Advanced robotic systems: AquaBeam and HYDROS

PROCEPT BioRobotics has developed advanced robotic systems, specifically the AquaBeam and HYDROS systems, designed for minimally invasive surgical procedures. The AquaBeam Robotic System is utilized for Aquablation therapy, which is FDA-approved for treating benign prostatic hyperplasia (BPH). The HYDROS Robotic System received FDA 510(k) clearance on August 20, 2024, enhancing its capabilities with features like the FirstAssist AI for ultrasound interpretation.

System	Approval Status	Key Features	FDA Clearance Date
AquaBeam	FDA Approved	Minimally invasive, uses water jet technology	N/A
HYDROS	FDA 510(k) Cleared	FirstAssist AI, integrated ultrasound, digital cystoscope	August 20, 2024

Clinical evidence and peer-reviewed publications

Clinical trials have shown that Aquablation therapy is effective and safe. The WATER study, a pivotal trial, demonstrated superior safety and non-inferior efficacy compared to traditional transurethral resection of the prostate (TURP). This study has been pivotal in establishing the credibility of Aquablation therapy within the urology community.

Key clinical findings include:

• Superior safety profile compared to TURP.
• Non-inferior efficacy across prostate sizes (30 ml to 80 ml).
• Enhanced efficacy for patients with prostates larger than 50 ml.

This clinical evidence has facilitated broader acceptance and adoption of Aquablation therapy, leading to its inclusion in several clinical guidelines by professional associations, including the American Urological Association.

Skilled workforce in R&D and clinical support

PROCEPT BioRobotics employs a highly skilled workforce focused on research and development (R&D), crucial for the innovation of its robotic systems. As of September 30, 2024, R&D expenses amounted to $47.2 million for the nine months, reflecting a 39% increase from the previous year, indicative of the company's commitment to advancing technology and product offerings.

The workforce is supported by:

• Ongoing training programs to enhance skills in robotics and surgical techniques.
• Collaboration with key opinion leaders in the urology community to ensure clinical relevance.

As of September 30, 2024, the company reported a net loss of $72.6 million, with total operating expenses of $170.3 million, including significant investment in R&D to sustain innovation.

PROCEPT BioRobotics Corporation (PRCT) - Business Model: Value Propositions

Minimally invasive treatment options for BPH

PROCEPT BioRobotics focuses on addressing benign prostatic hyperplasia (BPH) through its innovative Aquablation therapy. This therapy employs a robotic system that utilizes a heat-free waterjet to remove prostate tissue, offering a less invasive alternative to traditional surgical methods. The company has a substantial market opportunity, as approximately 40 million men in the U.S. are affected by BPH, and the incidence is expected to rise significantly with the aging population.

Enhanced patient safety and recovery outcomes

The Aquablation therapy has demonstrated improved safety profiles and faster recovery times compared to conventional treatments such as transurethral resection of the prostate (TURP). The pivotal WATER study, which is the only FDA pivotal study randomized against TURP, showed that Aquablation therapy provided superior safety and non-inferior efficacy across various prostate sizes. This advancement is critical as it addresses the common complications associated with traditional techniques.

Innovative technology integrating AI for personalized treatment

PROCEPT BioRobotics is integrating advanced technology with artificial intelligence (AI) in its latest system, the HYDROS Robotic System. This system includes the FirstAssist AI feature, which aids urologists in interpreting ultrasound images, enhancing precision during procedures. Such innovations are pivotal in personalizing patient treatment plans, making the surgical process more efficient and tailored to individual anatomical needs.

Value Proposition	Details	Financial Impact
Minimally Invasive Treatments	Utilizes heat-free waterjet technology for tissue removal in BPH patients.	Revenue from system sales and rentals increased to $58.9 million in 2024, a 44% increase year-over-year.
Enhanced Patient Safety	Clinical studies indicate lower complication rates compared to TURP.	Projected reduction in hospital readmission rates can lead to cost savings for healthcare providers.
AI Integration	FirstAssist AI enhances surgical planning and execution.	Investment in R&D increased to $47.2 million in 2024, reflecting a commitment to innovation.

PROCEPT BioRobotics Corporation (PRCT) - Business Model: Customer Relationships

Education and training programs for urologists

PROCEPT BioRobotics Corporation has established comprehensive education and training programs specifically designed for urologists to ensure they are well-versed in the use of the AquaBeam and HYDROS Robotic Systems. These programs are critical for driving adoption and optimizing the performance of their technologies.

As of September 30, 2024, the company reported a total revenue of $156.3 million, with significant contributions from system sales, rentals, handpieces, and service contracts. The education initiatives are part of a broader strategy to enhance the clinical competence of urologists, thereby improving patient outcomes and increasing system utilization rates.

Ongoing support and maintenance services

PROCEPT BioRobotics offers robust ongoing support and maintenance services for its robotic systems. This includes technical support, routine maintenance, and repair services for the AquaBeam and HYDROS systems. The company generated $8.9 million in service revenue during the nine months ended September 30, 2024, an increase of 64% from the prior year, indicating strong demand for these services.

The company’s gross margin for service contracts has improved, reaching 63% in Q3 2024, up from 54% in Q3 2023. This increase reflects the company's commitment to providing high-quality support while managing costs effectively.

Building a community of practitioners through feedback loops

PROCEPT BioRobotics actively engages with a community of practitioners through feedback loops that foster collaboration and continuous improvement of its products. The company has established strong relationships with key opinion leaders (KOLs) in the urology community, which has facilitated broader acceptance and integration of Aquablation therapy into clinical practice.

As of September 30, 2024, PROCEPT has an install base of 572 robotic systems globally, with 445 located in the United States. This extensive network allows for a rich exchange of insights and experiences, further enhancing product development and customer satisfaction.

Training Program	Revenue Generated (2024)	Gross Margin (%)	Customer Feedback Initiatives
Urologist Training Sessions	$156.3 million	63%	Regular surveys and focus groups
Technical Support Services	$8.9 million	63%	Feedback from KOLs and practitioners
Community Engagement Events	Part of overall revenue	Not applicable	Annual conferences and workshops

PROCEPT BioRobotics Corporation (PRCT) - Business Model: Channels

Direct sales to hospitals and surgical centers

PROCEPT BioRobotics primarily generates revenue through direct sales to hospitals and surgical centers. For the nine months ended September 30, 2024, the company reported total revenue of $156.3 million, with a significant portion attributed to system sales and rentals amounting to $58.9 million in the U.S. alone. The direct sales strategy has been pivotal in expanding the install base of their Aquablation systems, which reached 572 systems globally as of September 30, 2024, with 445 systems in the U.S..

Online platforms for educational resources

The company utilizes online platforms to provide educational resources and training for healthcare professionals. This strategy helps in enhancing the understanding and adoption of their technologies, particularly the Aquablation therapy. As part of their commitment to support clinicians, PROCEPT has developed a range of digital educational materials and webinars aimed at increasing awareness about their robotic systems and the benefits of Aquablation therapy.

Conferences and medical trade shows for visibility

Participation in conferences and medical trade shows is a crucial channel for PROCEPT BioRobotics to increase visibility and engage with potential customers. The company has actively showcased its products at various industry events, which facilitates networking with key opinion leaders in the urology community. It is noted that their products have been included in clinical guidelines by various professional associations, bolstered through these engagements.

Channel	Revenue Contribution (2024)	Number of Systems Installed (as of Sept 2024)	Key Activities
Direct Sales	$156.3 million	572	Sales to hospitals and surgical centers
Online Platforms	N/A	N/A	Educational resources and training
Conferences & Trade Shows	N/A	N/A	Visibility and networking with key opinion leaders

PROCEPT BioRobotics Corporation (PRCT) - Business Model: Customer Segments

Urologists and surgeons specializing in BPH treatments

PROCEPT BioRobotics targets urologists and surgeons who specialize in the treatment of benign prostatic hyperplasia (BPH). As of September 30, 2024, the company has established relationships with key opinion leaders (KOLs) within the urology community, which has facilitated the adoption of its Aquablation therapy. Approximately 40 million men in the United States are affected by BPH, and this number is expected to grow as the population ages, particularly among men over 65 years old.

Hospitals and surgical centers utilizing robotic technologies

Hospitals and surgical centers are significant customer segments for PROCEPT BioRobotics, as they invest in advanced surgical technologies. The company reported an install base of 572 robotic systems globally, with 445 located in the United States as of September 30, 2024. This customer segment is expected to expand as PROCEPT continues to market its HYDROS Robotic System, which received FDA clearance in August 2024.

Metric	Value
Install base of robotic systems (global)	572
Install base of robotic systems (U.S.)	445
Estimated number of men with BPH in the U.S.	40 million
Projected growth of men over 65 by 2060	Double

Patients seeking minimally invasive surgical options

Patients are a crucial customer segment as they seek effective and minimally invasive surgical options for BPH. PROCEPT BioRobotics’ Aquablation therapy utilizes a heat-free waterjet ablation technique, which offers a safer alternative to traditional surgical methods. The company has developed a significant body of clinical evidence supporting the efficacy of this treatment, with approximately 150 peer-reviewed publications. The emphasis on patient outcomes aligns with the growing demand for less invasive procedures in urology.

Metric	Value
Peer-reviewed publications supporting Aquablation	150
Revenue for the nine months ended September 30, 2024	$156.3 million
Net loss for the nine months ended September 30, 2024	$(72.6) million
Gross margin for the nine months ended September 30, 2024	60%

PROCEPT BioRobotics Corporation (PRCT) - Business Model: Cost Structure

Manufacturing and operational costs for robotic systems

The manufacturing and operational costs for PROCEPT BioRobotics Corporation primarily encompass direct labor, materials, and overhead associated with the production of their robotic systems. For the nine months ended September 30, 2024, the cost of sales amounted to $62.8 million, reflecting a 47% increase compared to $42.8 million for the same period in 2023. This increase is attributed largely to the higher sales volumes of system sales and consumables, as well as the associated manufacturing overhead costs.

Research and development expenses

Research and development (R&D) expenses represent a significant portion of PROCEPT's cost structure, reflecting their commitment to innovation and product development. For the three months ended September 30, 2024, R&D expenses totaled $16.6 million, a 44% increase from $11.6 million in the same period of 2023. Over the nine months ended September 30, 2024, these expenses reached $47.2 million, up from $34.0 million in 2023, marking a 39% increase. The rise in R&D spending is primarily driven by employee-related costs, including salaries and stock-based compensation, as well as increased consultancy and tooling expenses.

Selling, general, and administrative costs

Selling, general, and administrative (SG&A) costs are essential for supporting the company's operational infrastructure. For the three months ended September 30, 2024, SG&A expenses were reported at $42.7 million, a 30% increase from $32.9 million in the same quarter of 2023. For the nine-month period, SG&A costs totaled $123.1 million, up from $95.5 million in the previous year, representing a 29% increase. This growth is largely due to higher employee-related expenses and stock-based compensation as the company expands its commercial organization and administrative functions to support revenue growth.

Cost Category	Q3 2024 (in thousands)	Q3 2023 (in thousands)	9M 2024 (in thousands)	9M 2023 (in thousands)
Cost of Sales	21,459	16,228	62,835	42,816
Research and Development	16,647	11,600	47,232	33,950
Selling, General and Administrative	42,691	32,883	123,099	95,457
Total Operating Expenses	59,338	44,483	170,331	129,407

As of September 30, 2024, PROCEPT BioRobotics reported a net loss of $72.6 million, compared to a net loss of $78.4 million for the same period in 2023.

PROCEPT BioRobotics Corporation (PRCT) - Business Model: Revenue Streams

Sales of single-use disposable handpieces

The revenue generated from the sales of single-use disposable handpieces is significant for PROCEPT BioRobotics. In the three months ended September 30, 2024, the company reported sales of handpieces and other consumables amounting to $32.2 million, compared to $18.7 million in the same period of 2023, reflecting a growth of 72% year-over-year. For the nine months ended September 30, 2024, this revenue reached $88.4 million, an increase from $46.2 million in 2023, representing a 91% rise.

Period	Sales of Handpieces (in thousands)	Year-over-Year Growth (%)
Q3 2024	$32,236	72%
Q3 2023	$18,698	N/A
9 Months 2024	$88,447	91%
9 Months 2023	$46,244	N/A

System sales and rentals of robotic systems

Revenue from system sales and rentals has also seen robust growth. For the three months ended September 30, 2024, PROCEPT reported system sales and rentals of $22.8 million, up from $14.3 million during the same period in 2023, a 59% increase. In the nine months ending September 30, 2024, system sales and rentals totaled $58.9 million, compared to $41.0 million in 2023, marking a 44% increase.

Period	System Sales and Rentals (in thousands)	Year-over-Year Growth (%)
Q3 2024	$22,798	59%
Q3 2023	$14,295	N/A
9 Months 2024	$58,952	44%
9 Months 2023	$40,961	N/A

Service contracts and maintenance fees for installed systems

Service contracts and maintenance fees contribute to a steady revenue stream. During Q3 2024, revenue from service contracts was $3.3 million, up from $2.1 million in Q3 2023, a rise of 58%. For the nine months ended September 30, 2024, service revenue reached $8.9 million, compared to $5.4 million in 2023, reflecting a 64% increase.

Period	Service Revenue (in thousands)	Year-over-Year Growth (%)
Q3 2024	$3,336	58%
Q3 2023	$2,109	N/A
9 Months 2024	$8,863	64%
9 Months 2023	$5,405	N/A

Overall, PROCEPT BioRobotics has diversified its revenue streams across different segments, with significant growth observed in the sales of handpieces, system sales and rentals, and service contracts. As of September 30, 2024, the total revenue for the company was $156.3 million, indicating a 69% increase from $92.6 million in the same period of the previous year.

Article updated on 8 Nov 2024

Resources:

1. PROCEPT BioRobotics Corporation (PRCT) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of PROCEPT BioRobotics Corporation (PRCT)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View PROCEPT BioRobotics Corporation (PRCT)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.