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United States securities and exchange commission logo
July 23, 2021
Reza Zadno, Ph.D.
Chief Executive Officer
PROCEPT BioRobotics Corporation
900 Island Drive
Redwood City, CA 94065
Re: PROCEPT BioRobotics
Corporation
Draft Registration
Statement on Form S-1
Submitted June 25,
2021
CIK No. 0001588978
Dear Dr. Zadno:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1 submitted June 25, 2021
Market and Industry Data, page ii
1. We note your statement
cautioning investors not to give undue reliance to estimates or
market data included in
the prospectus. Such statement may imply an inappropriate
disclaimer of
responsibility with respect to the third party information; therefore, please
either remove the
potential disclaiming language or clearly state in this section whether
such information is
reliable and that you are liable for such information.
Reza Zadno, Ph.D.
FirstName
PROCEPT LastNameReza Zadno, Ph.D.
BioRobotics Corporation
Comapany
July NamePROCEPT BioRobotics Corporation
23, 2021
July 23,
Page 2 2021 Page 2
FirstName LastName
Our Company, page 1
2. Please clarify the meaning of scientific or technical terms the first
time they are used here
and in the Business section or in close proximity thereto in order to
ensure that lay readers
will understand the disclosure. For example, please briefly explain
what you mean by
cystoscopic, endoscopic, CPU, resective surgery, hemostatis and
peri-operative
transfusion.
3. We note your disclosure on pages 38 and 125 that your currently
marketed AquaBeam
Robotic System is a Class II medical device, which was initially
granted marketing
authorization pursuant to a de novo classification. Please revise to
include disclosure of
the Class II classification in the Summary as well.
4. We note your disclosure on pages 1, 4 and throughout the Business
section that your
Aquablation therapy delivers outcomes that are effective, safe and
durable across all
prostate sizes and shapes. Please note that determinations of safety
and efficacy are solely
within the authority of the FDA and comparable foreign regulators;
therefore, please
revise the prospectus to remove all references and/or implications of
safety and efficacy
for the use of your devices in treating indications for which you have
not received an
approved PMA from the FDA.
5. Please revise to explain when you commenced work designing the
AquaBeam Robotic
System, when you conducted the studies referenced in the prospectus
and when your
product received 510(k) clearance. Please also include a detailed
description of the patient
population for which your AquaBeam Robotic System for which you have
received FDA
510(k) clearance.
Our Solution, page 3
6. Please balance your disclosure with equally prominent disclosure of
the disadvantages of
your AquaBeam Robotic System, such as observed hemostatis,
peri-operative transfusions
and any other adverse side effects observed in your clinical trials,
as applicable.
Our Success Factors, page 4
7. We refer to your disclosure on page 4 and elsewhere in the prospectus
to nine clinical
studies and over 100 peer-reviewed publications demonstrating the
efficacy, safety and
durability of your Aquablation therapy. Please revise your disclosure
in this section and
in greater detail elsewhere to disclose, if true, whether you funded
or sponsored the
clinical studies and if your employees were involved in both the
studies and publications.
Reza Zadno, Ph.D.
FirstName
PROCEPT LastNameReza Zadno, Ph.D.
BioRobotics Corporation
Comapany
July NamePROCEPT BioRobotics Corporation
23, 2021
July 23,
Page 3 2021 Page 3
FirstName LastName
Summary Risk Factors, page 6
8. Please disclose as a principal risk factor the risk of substantial
dilution as discussed on
page 65. Also when discussing the risk of dilution in the risk factors
section, please
discuss the affect that the redeemable convertible preferred stock may
have upon
dilution.
We depend on third-party suppliers..., page 22
9. We note your risk factor disclosure on page 22 that for certain
critical components and
raw materials for your products, you rely on single source suppliers
and for which there
are relatively few alternative sources of supply. Please expand your
disclosure in the
Business section to discuss your sources, the availability of raw
materials and the names
of any principal suppliers. See Item 101(h)(4)(v) of Regulation S-K.
Delaware law and provisions in our amended and restated certificate of
incorporation..., page 66
10. We note your disclosure that the forum selection provision in your
amended certificate of
incorporate may have the effect of discouraging lawsuits against you
and your directors
and officers. Please revise this risk factor and your disclosure in
the Business section to
disclose that there is also a risk that your forum selection provision
may result in increased
costs for investors to bring a claim.
Components of Our Results of Operations, page 83
11. We note your disclosure on page 83 that sales of your products outside
the United States
represented that approximately 66% and 47% of revenue for the years
ended December
31, 2019 and 2020. You also disclose on page 102 that you are growing
your existing
presence in the large European markets, including Germany, France,
Italy, Spain and the
United Kingdom. Please expand your disclosure here to identify the key
foreign markets
that represented the sales of your products outside of the United
States.
Critical Accounting Policies and Estimates
Common Stock Valuations, page 94
12. Once you have an estimated offering price or range, please explain to
us how you
determined the fair value of the common stock underlying your equity
issuances and the
reasons for any differences between the recent valuations of your
common stock leading
up to the IPO and the estimated offering price. This information will
help facilitate our
review of your accounting for equity issuances, including stock
compensation. Please
discuss with the staff how to submit your response.
Reza Zadno, Ph.D.
FirstName
PROCEPT LastNameReza Zadno, Ph.D.
BioRobotics Corporation
Comapany
July NamePROCEPT BioRobotics Corporation
23, 2021
July 23,
Page 4 2021 Page 4
FirstName LastName
Business, page 97
13. We refer to your disclosure on page 98 under the first bullet point
under the heading
Significant and durable symptom relief and the surgical
retreatment rates observed in
your clinical studies. Please balance your disclosure to describe the
surgical retreatment
rates observed for patients who underwent TURP and other treatments,
as applicable. We
refer to your disclosure on page 116.
Market Overview, page 102
14. We note your disclosure on page 105 relating to dissatisfaction among
patients with the
effectiveness of their BPH medications. We also refer to your
disclosure in the first bullet
point on page 106 of your belief that the high rates of irreversible
complications are
largely due to use of heat-based technology to resect prostate tissue.
Please revise to
clarify the studies and the data that support your conclusions.
Our Clinical Results and Studies, page 111
15. Please revise to clarify whether each of your core clinical trials
were powered for
statistical significance and expand your discussion of the statistical
significance and p-
values with respect to improvements in IPSS and QoL scores, surgical
retreatment rates
and operative times, as applicable.
16. Please expand on the significance of peri-operative transfusion rates
and hemostatis
observed in your core clinical studies, including how the transfusion
rates and hemostatis
observed compare to TURP and other alternative surgical treatments.
17. We note your disclosure that you plan to follow patients in the WATER
and WATER II
clinical studies for a total of five years, with three-year data
already having been collected
and analyzed. Please clarify your follow-up plans for patients in your
OPEN WATER
clinical study beyond the 12-month follow-up.
Intellectual Property, page 123
18. We note your disclosure on page 123 relating to your patent portfolio
in the U.S. and in
foreign jurisdictions. Please expand your disclosure to identify for
each material patent
and patent application, as applicable, the scope and technology of
each such patent or
patent application, the type of patent protection and expiration
dates. Consider adding
tabular disclosure in addition to the narrative for ease of use.
Reza Zadno, Ph.D.
FirstName
PROCEPT LastNameReza Zadno, Ph.D.
BioRobotics Corporation
Comapany
July NamePROCEPT BioRobotics Corporation
23, 2021
July 23,
Page 5 2021 Page 5
FirstName LastName
19. You disclose on page 62 that you are dependent on intellectual
property licensed from
third parties, including AquaBeam LLC. To the extent material, please
expand your
disclosure in this section to disclose any additional third parties
from whom you license
intellectual property, the scope of and technology related to such
patent rights and the
material terms of such license agreements. Please also revise your
disclosure here and in
the risk factor disclosure section to identify AquaBeam LLC as an
entity affiliated with
your company.
License Agreement with AquaBeam, page 124
20. Please revise to disclose when the last-to-expire licensed patent and
PROCEPT Patent is
set to expire under the AquaBeam license agreement. Please also
disclose the upfront fee
and the aggregate amount of milestone payments to be paid or received,
if any, as well as
the aggregate amounts paid or received under the license agreement.
Principal Stockholders, page 152
21. In your revised prospectus, please include in the footnotes to your
table to identify the
natural persons who are the beneficial owners of the shares held by
Viking Global
Opportunities Illiquid Investments Sub-Master LP and for the Entitles
Associated with
Fidelity, as well as the address of each such natural person, as
applicable.
Note 2. Summary of Significant Accounting Policies
Revenue Recognition, page F-12
22. We note that you record revenue for both the sale and rental of
equipment and that on
page F-18 you have $1.2 million of capitalized rental equipment.
Please revise the filing
to clearly describe the accounting treatment for your rental revenue,
including general or
material terms of the lease agreements including any minimum purchase
commitments.
Tell us how your accounting treatment complies with ASC 842. Tell us
and disclose, if
material, the amount of rental revenue that is outside the scope of
ASC 606. Refer to ASC
606-10-50-4(a).
General
23. Please provide us with supplemental copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
have presented or expect to present to potential investors in reliance
on Section 5(d) of the
Securities Act, whether or not you retained, or intend to retain,
copies of those
communications.
Reza Zadno, Ph.D.
FirstName
PROCEPT LastNameReza Zadno, Ph.D.
BioRobotics Corporation
Comapany
July NamePROCEPT BioRobotics Corporation
23, 2021
July 23,
Page 6 2021 Page 6
FirstName LastName
You may contact Christine Torney at 202-551-3652 or Kevin Kuhar at
202-551-3662 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Jane Park at 202-551-7439 or Thomas Kluck at 202-551-3233 with any
other questions.
Sincerely,
Division of
Corporation Finance
Office of Life
Sciences
cc: Drew Capurro, Esq.