PROCEPT BioRobotics (PRCT) TD Cowen 46th Annual Health Care Conference summary

Commercial strategy and organizational changes

• Implemented a new launch team structure, reallocating tenured staff and establishing regional leadership to improve system launches and utilization efficiency.

• Launch team model aims to halve the time from purchase order to first 10 cases, with over half of new systems in 2024 expected to launch under this model.

• Sales force incentives were restructured to focus on same-store sales growth, simplifying compensation to reward productivity rather than behaviors.

• Internal feedback on changes has been positive, with high enthusiasm and stable attrition, but execution and accountability remain key.

• Commercial restructuring is complete, with ongoing expansion of launch team capabilities and a goal for all future launches to use the new model.

Inventory management and procedure volume guidance

• Achieved near 1:1 handpiece inventory to procedure volume ratio, eliminating incentives for excess inventory and aligning ordering with actual usage.

• Guidance allows for some additional destocking, but upside potential exists due to new system placements requiring initial inventory.

• Real-time procedure tracking is enabled by on-site staff and system connectivity, with inventory levels at each account closely monitored.

• Inventory equilibrium is now lower and more stable, supporting guidance for the year.

Pricing, discounts, and reimbursement

• Discontinued end-of-quarter bulk discounts, reverting customers to their contracted prices without renegotiation.

• No price increases were implemented; customers now pay the agreed contract price, improving pricing consistency.

• Category I code adoption and a 5% APC level increase have strengthened reimbursement confidence, with ongoing support to ensure proper coding.