Q4 2020 Pulse Biosciences Inc Earnings Call

Greetings and welcome to the pulse Biosciences fourth quarter, 'twenty and 'twenty earnings Conference call. At this time, all participants are in a listen only mode.

Question.

And what's your session will follow the formal presentation and.

Once you require operator assistance during the conference. Please press Star Zero on your telephone Keypad and you reminder of this conference is being recorded I would now like to try and this conference over to your host Mr. Philip Taylor Investor Relations. Please go ahead you may begin.

Thank you operator before we begin I would like to inform you that comments and responses to your questions. During today's call reflect management's views as of today February of 'twenty 'twenty 'twenty, one only and will include forward looking statements and opinion and statements. These statements regarding our plans and expectations relating to.

Two regulatory clearance and including the process timelines and.

And it outcomes, our commercial operational and scientific clinical and financial projections products, including the uses benefit and applications of such products, our commercial and regulatory strategies the impact of the COVID-19 pandemic and other.

And their future events actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are described in detail and our most recent quarterly report on form 10-Q filed with the Securities and Exchange Commission on November 9th.

'twenty and 'twenty, our SEC filings can be found on our website or on the SEC's website investors are cautioned not to place undue reliance on forward looking statements.

Note that this conference call will be available for audio replay on our website at pulse Biosciences Dot com on the news and events.

Section of our Investor Relations page with that I would now like to turn the call over to President and Chief Executive Officer Darrin Euchre.

Thank you all for joining us this afternoon as the organization pulse Biosciences has recently achieved major milestones that significantly advance our mission to offer bioelectric.

Electric medical solutions that make meaningful differences for the betterment of patients and clinicians.

Just weeks ago pulse Biosciences received FDA clearance and CE Mark approval for the <unk> system.

As a result, the company has transitioned from our clinical organization focused on the observation and evaluation of.

On a broad range of medicinal therapeutic potential opportunities as well as regulatory validation across the number of geographies two of commercial organization driving adoption of our novel cell effects system with cloud connect services.

'twenty and 'twenty was truly a transformational year for pulse biosciences and his latest strong.

Foundation for commercial growth and expansion of our cell effects of technology platform, our <unk> system and its embedded hardware software and cloud technology represent a new era of energy based medicinal therapy platforms.

On the call today, we are excited to provide a detailed update on our fourth quarter and more recent accomplishment.

I'll start by describing how the cell effects system regulatory approvals shape, our corporate focus and priorities in 'twenty and 'twenty, one and we'll outline the start and direction of our controlled launch program, including continued scientific community engagement and then Sandy will detail the financial results before I provide color on significant therapeutic opportunities.

And he needs beyond dermatology and open the call for Q&A.

In 2020, we set three main business objectives and were successful on all three fronts.

The first objective was to achieve regulatory clearance for <unk> system, and the U S. The European Union and Canada.

The second objective was to prepare.

There for the commercial launch of the <unk> system with cloud connect services and.

And our third objective was to further explore evaluate and prioritize meaningful therapeutic opportunities outside of dermatology.

Our success with these three objectives drives our priorities for 'twenty and 'twenty one.

This year of major.

And <unk> and top priority is the execution of our unique controlled launch program for the sell of X system with cloud connect services and the U S and EU and eventually in Canada.

Our second objective is to continue to progress our stepwise regulatory strategy with FDA and the U S expanding the cell effects systems indication.

And part of us to specifically the lesions, including sebaceous hyperplasia or S. H cutaneous non genital warts and other benign lesions, we will maintain our presence and the scientific community, where we're building our rapidly growing library of clinical evidence on the efficacy safety and patient care and provider value.

Of the sell of X platform.

And Additionally, we will continue to do advanced therapeutic opportunities outside of dermatology.

Before I cover our new objectives, and more detail I would like to explain our technology for anyone new joining us today.

The first commercial product at pulse Biosciences is a multi application platform called the <unk>.

The FX system that delivers our proprietary nano pulse stimulation or N. P. S technology to the skin initially for use in Dermatologic procedures.

N P. S isn't nanosecond pulse energy based modality offering unique benefits N P. S as of non thermal modality that affects only cellular structures, while leaving.

Cellular structures unharmed.

Third the thermal modalities the sale of specific nature of N. P. S can lead to enhanced aesthetic outcomes and general Dermatologic procedures as non cellular college and is unaffected while the problematic cellular tissue is completely eliminated.

We believe our technology represents a significant step.

Non of procedure for his thought of aesthetic dermatologists and could provide the ability to treat conditions that were not addressed previously because of the collateral damage using prior modalities could be worse than the original condition.

The <unk> system is the software enabled tunable cloud engage console the powers of handheld treatment applicator.

For the highly customizable configurations of applicators and energy settings enable a wide range of procedural settings to address multiple dermatologic conditions. It is designed to accommodate the clinical workflow preferred by dermatologists with patient procedure times as quick as 15 minutes.

Based on our extensive industry.

Free experience and a collaborative process with clinicians we designed the proprietary integrated cloud software infrastructure of that links our cell effects systems to our internal resources, which we call <unk> cloud connect it.

It is the backbone of our innovative utilization based business model that aligns the interest of patients practices and the company.

The <unk> cloud connect is the cloud application that provides a novel suite of tools that integrates the customer the system, our ecommerce customer portal and practice management tools to track utilization data and other metrics, while on the back and connecting to our internal customer relationship management system and enterprise resource planning system.

The <unk> marketplace of part of the <unk> cloud connect services is our customer portal, where medical practices purchase and wirelessly download cycle units directly to the cell of X system.

Cycle units are purchased and and consumed on a per lesion basis. So the more lesions of the patient once cleared the more cycle units are required.

This enables and preferred economic model is the physicians have fixed cost per lesion and can charge of the patient on a per lesion basis, which is aligned with the patient's preference. Our model of contrast, with the currently employed disposable and single use based medical device models. We're moving many of the economic barriers created with disposable use models.

And reducing the purchasing and inventory burden on the clinic that can occur in those models.

The cell effects marketplace also provides the dashboard of utilization metrics for the clinics to monitor the productivity and profitability of the self X system on a daily basis. This novel capability enabled by the seller of <unk> cloud connected.

Connect infrastructure is the key feature that we believe will drive adoption of the sell of X system by providing key insights to the physicians and establishing and growing is the Scott a successful south of X franchise.

One last note about cell effects of cloud connect is that it facilitates direct connectivity for pulse biosciences to remotely.

Totally performed software upgrades to the Celtics system as well as provide any service functions in real time, because of this ability to streamline and be responsive and reduce disruption to the clinical workflow cell effects cloud connect allows us to provide next level support and enable seamless commercial growth for our customers.

We believe this advanced delivery.

Livery model not only enhances the delivery of NPS technology, but will create a premier experience and growth potential for our valued physician customers and their patients.

Our obligation and commitment is to make it as seamless as possible to integrate the <unk> system and cloud connect experience into thousands of practices.

That brings us to our first two objectives for the year regulatory clearance and our controlled launch program.

Following FDA clearance and CE Mark approval, we are now permitted to market <unk> systems, and the U S and the European Union.

The controlled launch program was successfully initiated within days of our respective approvals, we have now shipped to <unk>.

The stomach to U S and European physicians and they have been trained and are performing procedures on their patients executing our commercial launch of new medical technology. This quickly after regulatory clearance is the significant accomplishment and a single geography.

And to do so in two major geographies simultaneously requires and experienced focus.

Focused and well prepared team and I would like to congratulate our organization for making this happen.

We have an experienced and talented and team in place, including sales marketing customer service and operations professionals, who are facilitating this launch we plan to grow this team as our commercial efforts ramp.

The facts were important and how quickly we launch though is the thoughtful and measured approach. We are designed to ensure key opinion leaders. The most influential physicians and the space and their patients share and exceptional experience with the sell of X system and the best practices related to this experience or observe fully understood and shared across our clinical.

Nicole partner base the.

The level of excitement and commitment to our technology from controlled launch participants has been extremely encouraging we are invested and helping these kols create model sell of FX franchises in their practices.

And turn the Kols have demonstrated their commitment through participation and extensive virtual and practical training.

Ah represents a reciprocated commitment to their <unk> system.

Physicians and their staff are excited not only to learn about how to perform the procedure, but also how to educate their patients about the differentiated benefits of our selling of X platform.

We are very pleased with where we stand and less than a month into commercialization.

The real use the remainder of 2021 to phase in our K O all participants and the U S and Europe.

Based on the success of our 2020 awareness scientific and educational programs and our immediate ability to service demand post regulatory clearances, we have decided to embrace 75 clinics and our controlled launch program across the U.

We're going to you later.

Later on the call Ed will provide additional details on our approach and early experience.

With regard to our Q4 of 2020 submission to health, Canada for approval of the <unk> system. We recently received a number of questions and the form of and additional information letter and expect to respond to the questions and the next couple of weeks.

And according to health, Canada guidelines once we submit our responses health, Canada and May take up to 45 days to complete the review based on this timeline. We expect the review to be completed in early Q2, 2021, and if the review results and of Canadian Medical device license for the sell of X system. We will begin our controlled launch program and Canada immediately.

Our second objective for 'twenty and 'twenty, one is to drive progress on our stepwise regulatory strategy with F. D. A.

Now that we have received the intended general indication label. The one we were pursuing we were able to make subsequent submissions for indications for the treatment of specific lesions the.

The potential additional clearances will enable us to assist physicians.

And more targeted marketing of the procedures to their patients as we've shared we will initially pursue specific indication clearances per sebaceous hyperplasia, followed by non genital warts. We view these as large and unaddressed market opportunities that our customers are not able to treat their satisfaction with existing technologies.

We announced in January that the treatments and the pivotal comparison study to evaluate the treatment of S. H are complete we are finalizing this five 10-K submission and it is on track to be submitted to the FDA as early as the end of the first quarter.

In parallel we have been working on designing and executing our trial for non genital warts the I D.

Proved for a pivotal the comparison study to evaluate the treatment of cutaneous non genital warts and we recently treated the first patients and the study.

We expect enrollment to be completed in Q2, 2021 and submission of the data and our five 10-K to F. D. A to take place in Q4, 'twenty and 'twenty one.

The cadence.

And so we have established with our clinical and regulatory work is intended to drive regular cell effects system application expansion over the coming years.

Now I will turn the call over to Ed to share more on her plans and progress for the controlled launch of the <unk> system, and the United States and Europe.

Thank you Darrin I would like to start off by congrats.

He was really the the entire pulse organization and thanking our clinical research partners and dermatology from the collaborative achievements represented by a recent regulatory clearances and the continued clinical and scientific progress that will be the foundation of our controlled launch process going forward.

This is a very exciting time.

Time for pulse Biosciences, and I'm thrilled about the commercial opportunity and.

And the team that we're building.

Today I'm going to review the mechanics of the previously discussed controlled launch and how this approach is indeed building the foundation for the short.

Intermediate and long term acceptance.

And growth of the South X system and cloud connect services, among leading dermatologist around the globe.

In the aesthetic dermatology market, the acceptance and adoption of and innovative technology platform like the south of X system begins with the top tier of respected.

Key opinion leaders or Kols and aesthetic dermatology.

This elite group of physicians have a long track record for both clinical expertise as well as commercial acumen, and we're introducing new technologies into our market.

In anticipation of recently secured FDA clearance and CE Mark approval.

Will we planned well in advance to implement a carefully controlled and limited commercial launch to secure and established teaching and research among kols will be crucial to book.

Clinical acceptance and the commercial success of the South of X system. When we launch to the next wave of early adopters.

These early adopters will look to the guidance of our controlled launch Kols on best practices for the integration of the south of <unk> into their high and aesthetic practices and with the demand and cash paying patients that are marketing research has identified as highly likely to prefer the new setup.

Feature over older methods.

This controlled commercial launch plan is a detailed comprehensive and disciplined approach to ensuring that this high level of group of advocates and advisers, who are trusted by the peers will have the best possible initial experience with the <unk> system.

Experts and the positive experiences and pearls of clinical wisdom and commercial experiences of these initial K. All participants will then be shared with their peers and a much more powerful way than any direct company promotion and will serve as professional of validation and clarification of the full potential of.

And the <unk> system with cloud connect and how it can benefit their patients and high and practices.

These controlled launch participants also be important criteria of strategic geographic location and the top aesthetic dermatology markets and media markets with connections.

<unk> and existing relationships to facilitate both peer influence on the next wave of early adopters among a set of specialists as well as media influence both traditional mass media as well as the all important social media influences that we expect to create widespread geographic exposure to aesthetic patients.

Taken together the controlled launch is creating both early adopter of physician awareness support and demand, but also of forming the basis for viral awareness of the south ex procedure with prospective patients who will also influence early physician adoption of adoption.

In the months that preceded the FDA clearance.

Your approval our team has planned of calendarize rollout of controlled launch participants through continuous engagement on a high scientific level based on our on our impressive combination of peer reviewed publications.

And major medium podium presentations.

And just after our regulatory clearances.

And since we began our standardized series of virtual training sessions to Orient controlled launch physicians and the key staff numbers on what is expected to meet the requirements of a controlled launch of participation.

We then execute formal agreements to ensure that all aspects of both training and execution are explicitly.

As per student.

One aspect of the control of lunch program or participating clinics is to identify and consult with and treat at least 40 patients to qualify as a center of excellence and share their experience with other physicians.

And they have agreed to collaborate with us and share.

And from all aspects of the experience.

Expectation and satisfaction surveys regarding the experience and outcomes will be completed by patients.

<unk> and staff members for each procedure that they perform.

We expect these physicians to treat and report on 40 patients in a timely.

Database and return recruiting 40 patients and providing the applicable quantitative and qualitative data positions will earn credits equal and value to the purchase of the sell up X system.

When this commitment is complete.

Oh and procedures will generate revenues to pulse on a per patient per lesion.

Basis.

Both during the controlled launch and into the future our self X cloud connect monitors of use of our device on a real time basis.

In addition to having meaningful utilization data, we expect the cloud connected south Ax system to provide other quantitative.

And qualitative information around the usage and operation of our device that will benefit both of the physician customer as well as gross.

We envision and <unk> cloud connect to provide bulk of.

Pre and post form of utilization and revenue analysis and it will assist.

And based on services and ourselves to fully understand the value of their self X franchise and provide benchmarks for comparison with their peers.

This controlled launch program will serve as both the commercial treasure trove of key opinion leader engagement and advocacy.

As well as the data.

<unk> gathered by our network of interconnected devices that will provide a gold mine of strategic insights that will benefit our future business development and.

And new applications that we plan to launch in the near future.

The first three quarters of 2021 will be spent focused on controlled launch practices.

Since their success.

Earnings and standardizing best practices, and optimizing patient and physician experience.

This scheduled roll up approximately 75 practices across the U S and EU includes initial sites across major territories.

Data risk accelerates with the majority of practices coming on board and Q2.

And the remainder in Q3.

These experiences.

Along with the leverage of paywall advocacy meet.

The media exposure and the valuable data gathered through our cloud connected <unk> systems, all set the stage.

And then and we're beginning our wider selling effort with the first wave of early adopters as we move into the late summer early fall buying cycle of aesthetic device purchases.

As we've described in the past our distribution model in Europe will most likely be a hybrid approach of direct distribution.

<unk> vision and independent distributors.

And the controlled launch participants and Europe include physicians, and Germany, France, Spain, which represent our initial direct distribution territories.

With this group, we will maintain our high touch controlled launch model.

In.

Distribute our controlled launch of the South of X system aims to build the foundation of Walter and casual users.

Optimize the patient and physician experience.

We generate data via the <unk> cloud connect and established clinical and commercial advocacy that will influence both early adopter.

The upper physicians and consumer and media exposure of the new setup ex procedure.

We have the systems and processes in place to measure and evaluate our performance each step along the way.

As we execute our plan, we will secure early adoption from industry Influencers, who.

We will have gained significant experience with the procedure and then continued utilization of revenue generating systems.

Patients physicians and staff will have quality experiences and be likely to recommend the south ex procedures to peers and utilize their connections to both social and mass media.

Validation data will be generated across the clinical outcomes patient identification utilization pricing strategy and practice economics, all available to share with the next wave of adopters.

Finally, we will have one true champions of the selloff ex experience, who we believe will be willing.

Moving to make podium presentations share.

Share of their experiences on social media and advocate the all important best practices with an important new technology from which they will be appropriately seeing themselves as innovators and contributors.

This 2021 controlled launch success forms of funding.

<unk> for our significant 2022 commercial growth and additional application development.

Our preparedness underpins, our competence and explains our excitement about this opportunity as it grows every day.

From our early experience the participants and the controlled launch are shown.

Same level of excitement about the clinical and financial potential of of properly integrated self ex procedure into successful aesthetic practice, our plan is to seed and grow the excitement around the south ex procedure as more participants gain more experience and create a positive.

Showing this from the podium.

And the media and in other peer to peer settings, which is a cornerstone for broad adoption growth and recurring user revenue over the long term.

This cornerstone is being fortified by our continued successes with the publication of new clinical data.

But including podium presentations during upcoming meetings of two of the most prestigious events and all of dermatology.

Including presentations of data on potential new applications for the south of <unk> system.

And so opex cloud connect services that have the potential to increase the future utilization.

Okay.

Or the.

It may meeting of the American Society of lasers, and search surgery and medicine four new studies were accepted for podium presentation. At this largest worldwide meeting of physicians that specialize in the use of energy based devices Dr.

Dr. Joe Cohen of leading dermatology researcher and most surgeon from Denver, Colorado will present, the Brazil.

The.

Early feasibility study of of the clearance of common nearby or malls, which is a very difficult lesion and declare without surgery.

Another data set and being presented by Dr. Ted Lane of Austin, Texas, which provides further evidence of the sum of X procedure efficacy and clearing warrants.

Usually in a single treatment session.

Dr. Suzanne Kilmer from Sacramento, California, with one of the most prominent innovators in the development of the energy based systems.

I'll be presenting data showing optimized treatment approaches and the clearance of sebaceous hyperplasia.

And application that represents a major unmet.

Results need and aesthetic dermatology.

Also at the ASRM on mesh Dr. Bruce Katz of New York City, we'll present the latest results showing the feasibility of the south of X procedure to address difficult to treat back acne.

And finally, Dr. Thomas Rohrer from the prominent Dermatology center skin care physicians.

Unmet best of show, Massachusetts will present important new consumer research that provides clear evidence that aesthetic dermatology patients value benign lesion clearance out of procedure feet higher than that of mainstream aesthetic procedure.

Like Botox fillers.

These most recently accepted.

Abstracts for publication and presentation or just a continuation of our strategy to grow our support from key opinion leaders as the foundation for long term acceptance and growth for our revolutionary New South of <unk> technology for years to come.

Now I will turn the call over.

And so the sandy.

Thank you Anne.

For the fourth quarter of 'twenty, and 'twenty operating expenses of $13 $8 million compared to $13 $9 million from the prior year period decreases in general and administrative costs offset by increases and research.

And development costs drove the slight decline and overall operating expenses opt.

Operating expenses from the three months ended December 31, 'twenty, and 'twenty, including $2 $4 million of noncash stock based compensation versus three $5 million and the prior year period.

Over to the 'twenty 'twenty operating expenses were $50 million compared to $48 million in 2019.

<unk> based compensation from the 12 months ended December 31st 2020 was $10 $1 million compared to $11 $3 million and the prior year.

And period, the increase and operating expenses was primarily driven by the expansion of operational infrastructure and increased head count to support commercial preparations.

General and administrative expenses consist of salaries and related employee expenses for executive sales and marketing.

Getting finance legal human resources information technology, and administrative personnel as well as professional fees patent teas and costs insurance costs and other general corporate expenses Gen.

General and administrative expenses decreased by approximately $1 million.

The $6 $2 million for the three months period ended December 31, 'twenty and 'twenty from seven $2 million. During the same period in 2019, primarily related to a $1.3 million reduction and stock based compensation and point $4 million.

And travel and training and other employee related expenses as a result of COVID-19.

These decreases were partially offset by an increase and employee compensation expenses driven by increased head count from a year ago.

For the year ended December 31 2000.

'twenty general administrative expenses increased by approximately $500000 to $22 $9 million from $22.3 million for the year ended December 31, 2019, primarily due to increases in personnel business.

Insurance and the facility expansion costs related to our headquarters and Hayward, California, offset by 1.4 million dollar reduction and stock based compensation and point $9 million and travel training and other employee related expenses as a result of COVID-19.

Research and development expenses consist of salaries and related expenses for manufacturing and research and development personnel.

Well as clinical trials and consulting costs related to the design development and enhancement of our potential future products.

Research and development.

Sensors increased by approximately $800000 to $7.4 million for the three month period ended December 31, 'twenty 'twenty from $6.6 million during the same period and 2019, primarily due to increases in personnel facility related.

And the next boss and consulting and outside services and support of our five 10-K and I D. E submissions, all partially offset by reductions and clinical trial expenses sponsored research prototype material and devices and travel expenses from a year ago.

For the year ended December.

Weighted 30, <unk> to 'twenty, and 'twenty research and development expenses increased by approximately $1.5 million to $26.4 million from $25 million for the year ended December 31, 2019, primarily due to increases in personnel.

Assembly facility related costs, and consulting and outside services related to our G. L. P. Preclinical studies and support of our five 10-K submission for a general Dermatologic indication. These.

These increases were partially offset by reductions and clinical trial expenses prototype material and.

Now it is related to our initial sell effects builds and travel expenses as a result of COVID-19.

Net loss for the fourth quarter ended December 31, 2020 was $13.8 million in line with the same net loss of $13 $8 million for the fourth quarter ended.

Device December 31 and 2019.

Cash cash equivalents and investments totaled $20 5 million as of December 31, 'twenty and 'twenty compared to $29 6 million as of September 30th 'twenty and 'twenty cash.

Cash used for the three months ended December 30.

And it's 'twenty and 'twenty was $9.1 million cash used for the full year, 'twenty and 'twenty totaled $34.6 million compared to $34.2 million for the full year 2019.

On December 31, 'twenty and 'twenty, we delivered a notice of redemption to.

The first of all outstanding warrants to purchase shares of our common stock issued and in.

In connection with our June 2020 rights offering.

Prior to the redemption date of February 5th 2021, 636432 warrants were exercised generating a.

And to regionally $4.5 million and gross proceeds of these.

These respective gross proceeds are not included in the year end cash balance of $25 million.

Looking forward to 'twenty 'twenty, one cash usage will increase incrementally as we invest and activities to some.

<unk> broad commercial operations, including building, our commercial team and Europe, increasing inventory levels and conducting additional studies to support indication expansion with the F. D. A.

Strengthen our balance sheet and early February we announced and at the market equity offering.

During program, having an aggregate offering price of up to $60 million. We believe this is a financing mechanism that will allow us to respond to investor interest and diversify the shareholder base capitalizing on our recent accomplishments and a minimally dilutive and shareholder friendly way.

We will continue to use our best discretion and authorizing distribution of shares usage of this program has been nominal to date and we will provide an update next quarter.

On the top line revenue generation will begin as each controlled launch clinic completes their 40 patient commitment.

Ops to take ownership of the cell affects system.

As such incremental revenue generating systems will come on line throughout the year of systems are implemented of practices and a complete initial procedures.

And the second half of the year, we expect to begin direct cell effects system sales.

And Hayden is reflective of the intentions of our controlled launch strategy calculated initial investments to enable and drive long term adoption and growth.

For these reasons revenue in 'twenty and 'twenty, one will be minimal for the first three quarters.

Now I will turn the call back.

This garen.

Thank you Sandy to conclude we have begun the next chapter of pulse Biosciences, our product and technology of invalidated by both of the FDA and our notified body in Europe, we have generated clinical data that demonstrates the ability of our <unk> system to treat common dermatologic conditions with improved outcomes.

Back to their work to date has generated significant demand for our technology.

We've been able to partner and collaborate with a large group of top of aesthetic dermatology Kols to build the foundation of real World best practices for developing new business lines in their practices, while providing patients a best in class of outcome and experience with self ex proceed.

<unk>.

We are confident we will continue to execute our controlled launch strategy with the same detailed precision demonstrated by launching just days after the receipt of clearance and approval and we look forward of providing updates on this progress and the coming quarters.

The future is bright for pulse biosciences, and the commercial launch of the cell.

<unk> system with cloud connect services and dermatology is just the beginning.

Our mission at pulse Biosciences is to build a viable business, we strategically chose dermatology as the initial market to achieve this and our focus on this mission remains clear and unwavering.

What is also clear now more than ever is that the sell.

<unk> system, and NPS technology represent a new era and energy based therapies with the potential for broad applicability and medicine.

From the start of our development of the sell of X system. Our goal has been to design a tunable software controlled cloud enabled platform capable of safely delivering NPS not only and.

<unk>, but across a broad set of potential applications and and various health care settings.

We believe we have accomplished this goal.

Over the last several years, we have made significant investments and scientific and clinical programs in dermatology and this has given us unique insights and a deeper understanding of this novel and proprietary.

<unk> platform technology that will inform and accelerate the use of NPS and other application areas.

So today, we are poised to leverage our broadly applicable cell effects of platform our deep understanding of the novel non thermal cellular mechanism of NPS, our experienced team of energy based medical.

Self atg development, and commercial veterans, and our broad and growing intellectual property portfolio to pursue a number of compelling application areas within and outside of dermatology.

We are constantly examining expanding the range of therapeutic applications relevant to the cell of X system and cloud connect platform potentially spanning.

Technology, such as Gastroenterology, cardiology, pulmonology and the ear nose and throat to name a few.

We believe the number of these opportunities are comparable to dermatology in terms of patient needs and potential market opportunity.

It needs to be said that we take on considerable risks as we engage and expansion opportunities there is no.

The fields, we will be successful having.

Having said that not pursuing these activities encourage the risk of not living up to our potential our vision our obligation to one another and our commitment to making a significant impact for the betterment in the fields of human health care.

It's early to discuss specifics.

<unk> to say, we are enthusiastic to be moving forward.

Assurant and this matter and we will continue to keep our eyes wide open all the while being focused on what matters most.

This is consistent with the broader mission, we have had at pulse Biosciences from day, one that is to utilize the NPS technology for the betterment of patients and physicians across medicine, while continuing to drive meaningful shareholder value.

Forward joining me now for Q&A are Ed Ebbers, Executive Vice President and General manager of Dermatology, and Sandy Gardiner Executive Vice President and Chief Financial Officer, Operator, Please open the call for questions.

At this time, we'll be conducting a question and answer session. If you would like to ask the question. Please press star.

Star one on your telephone keypad, a confirmation tone will indicate your line is and the question queue you.

You may price start to mature and move your question from the Q over Q.

And the steep using speaker equipment and may be necessary to pick up your handset before pressing starkey one moment, while the poll for questions.

My first question comes from the line of RK with H C. Wainwright you May proceed with your question.

Thank you.

Good afternoon and.

And then sandy congratulations.

And on I'm getting the early launch is done and also.

Putting on.

And the first.

The treatment is utilizing the <unk> system.

Suddenly all the good news.

Just just to get a little bit more color on.

On the on the 75.

And.

Clinics that you're are looking.

And at four of your for your initial.

Launch.

You said youre trying to do this and in orderly fashion and you know and calendar wise. So at what point do you think you would have and you know initiated with the seven day clinic.

And I'll.

And I'll follow up the couple of more after that.

Yeah, Hey, RK. This is Darren and thanks for joining the call and and yeah. Thanks, a lot for for your support.

Yeah.

The way to think about her and the way we think about the controlled launch is we.

Think of that.

And 75 clinics across the U S and Europe is the right number based on sort of size of these territories.

And well as.

As we announced we have already started rolling them out in the clinics and really begun the process of this controlled launch.

And we've which as you know.

The dry before and Ed described on this call is it really a comprehensive and detailed program whereby we work with these kols.

To really understand how best to introduce the cell of X system and the cloud connect services into their practice.

I.

And we disappoint it would be premature to talk about exactly when we think the 75th and.

It would be installed and you know.

And I think as we mentioned we started these installations.

Already we expect the bulk of them to happen and the second quarter and then probably some early in the third quarter. So that's.

It did and how we see it but I think we also appreciate that and we're going to learn as we go we're relying on these kols to really help us understand these best practices for introduction of this.

And I'm very unique cell effects technology, and so I think we'll take it as it comes in and accelerate.

And kind of as we're able.

Thank you from that and then the.

And is 75 clinics of that to your chosen book on both sides of the Atlantic.

And so are these of majorly.

Teaching hospitals are the clinics that have.

And have physicians.

That actually can.

The influence.

Additional dermatologist.

In terms of trying to get them to adopt of Ben when you already.

And two to broaden the brought on the launch.

And that's the question and then question B.

You said.

And you could potentially get Canada.

Since you said part of five days from your reply to the quest.

Questioning.

And let's say by the end of second quarter, you're all done with that.

Does that 75 clinics.

And include.

Canada.

And I'd be in addition to what you are currently.

And looking looking to launch it.

Yeah. Thanks.

So I'm and I'm.

I'm going to ask Ed to respond to part a of that question.

And who those kols on and their influence and the community and then I'll jump in and talk about the second piece.

Thank you.

Yeah, Okay. Thanks for the question.

The world of aesthetic dermatology is very different from traditional hospital based procedures.

And it's down mid box of physicians, who understand that the sense.

On the difficult cash paying business and typically you have established their own.

Centre or actually centers.

And treat these patients and their own facility. So.

It's not really like the traditional technology in that respect.

Having said that popped.

And they're very closely associated with each other and that they belong to trade groups that discuss the scientific findings associated with the energy based devices on a regular basis. So when we talk about the American society of lasers, and medicine and surgery.

These are their peers really worldwide that they look to win.

The two new technologies that they themselves should be adopting.

And then something like the.

Contains book our Kols, but also the next generation of early on.

The doctors that would be listening to them for what should be coming next and the terms of new energy based devices so and.

And in that regard.

And it comes as a very very different different model than what is traditional and medical devices and among the reasons why our program is global in nature and geared towards this network of physicians as opposed to a particular hospital or a particular center.

Okay. Thank you.

Yes, and to part B with regard to Canada.

I think to some extent it depends a little bit on the timing, but given kind of what we know and what I communicated I think we expect that we would likely add.

Handful of control large sites in Canada, and probably in the areas.

That you can imagine the major metropolitan areas.

Hum.

And I don't know if this could be considered of technical but I'm just trying to understand in.

In the <unk>.

In the seller cloud system.

Since you are launching on both sides of that Atlantic.

Is are there any and any differences in terms of technology itself, but it is.

And how how secure the data would be or anything in terms of communication between.

And the mother ship, which is.

Yeah.

On your offices.

But to the different clinics out there is there any differential or what I'm trying to get at is like you know how much would this be learning for management as much as it is for the clinics.

Yeah, that's a good question so.

Our cell effects.

Connect infrastructure is something that we've developed right along with the cell effects system, we contemplated from from the get go that we would be a global company and have products shipped globally and the cell effects shift globally in particular, so we've.

Cloud and a lot of time really developing that infrastructure and making sure that it is just as seamless and Europe as it is and the U S. As it is in Canada and will be and other parts of the globe. So.

I think I, you know I think one of the things too.

And.

And to realize is that the.

These cloud based technologies and everything is sort of moving to the cloud and residing largely in the cloud is not something we have to spend a lot of time developing from the technology perspective. So I think you can appreciate that we leverage a lot of the technologies.

And the developed and that space.

By companies that are significantly larger than us.

And across a lot of different verticals and so we take advantage of of those technologies and certainly other companies are utilizing technologies that are useful globally and what.

We do from a proprietary perspective.

The Gs, but it is really the connection of our sell of X systems inside each one of these clinics and up to the cloud and then the integration of that data into our back end infrastructure.

And that we can both provide analytics and data to clinics, but also we.

We have access to that as well and it and it's all around trying to create a better experience for the clinics for patients and allow us to serve them better so.

And again, we built it from the beginning to be global globally available.

And we work.

Spectre and each locality to make sure that at the clinic level, they're able to connect the cell effects to the cloud.

And and so far so far so good as it relates to that.

Thank you thanks for taking all my questions.

And welcome thanks, Okay.

Our next.

Work and comes from the line of Michael Fox with Party City capital.

And sticking with your question.

Hey, guys congratulations on the recent rig.

Regulatory approvals and the exciting news about commercializing the <unk> the <unk> system.

With regard to the dermatology role.

Question I would imagine the timing could be pretty good given that the countries potentially opening up after the pandemic are you guys hearing that from the dermatologists that you speak to about pent up demand that people, who may have missed appointments over the last year and now they're.

Pent up demand from.

And so with dermatologists.

Yeah, Hey, Mike Thanks, a lot for the for the question and for joining the call. It's good to hear from you. So I'll just make one quick comment and then I'll hand, it over to Ed Ed can comment and he's been.

And then traveling both in the U S and in Europe as we as we get this.

The appointment of launch going so he has some.

In the field experience, but I think the one thing we have heard just generally is from a lot of clinics is they are definitely back up and running and.

And they've done a very good job at understanding how to open and safely for patients and provide procedure.

And I think one of our earlier experiences, which you may recall from the fall was that we ran a clinical study here and the U S for sebaceous hyperplasia, and we were able to enroll that study and just about five weeks and <unk>.

Pulling 60 patients across five centers. So it's the it's a small sample.

Both sides, but I think it's an indication that these clinics are up and running patients are interested in procedures like ours that we have the offer to treat their benign lesions and and clinics and figured out how to make that happen. So let me hand, it over to Ed Ed maybe you can comment on on your in the field experience.

<unk> so all of it.

And I won't talk on what Darrin just said.

We are of very optimistic.

Customer concerning the sort of pent up demand, which I think is a term that you used it's not like pent up demand.

The people, especially and this when I think of as the luxury goods market that haven't.

Yeah, the spend their money on and certainly self improvement is right up on the list of things that they're thinking about in the post COVID-19 world when theyre more likely to see people in person and again, which we're all looking forward to so I see that the underlying fundamentals of of the men are healthy from both the supply standpoint.

And that is that there's physicians, who are used to having very lucrative practices, who had to operate on reduced levels, who are ready to.

Increased their throughput going forward, so I expect that to be the case currently bookings are quite.

And quite a few months ahead of time.

And I imagine more patients will be coming out of the wood works once.

Once we start getting through the.

The same day, it's something we're all talking about in terms of society of being much more active than it's been recently and that's true in Europe as well I'm really both fronts and that is pent up demand.

And also sort of pent up supply because of the lack of our.

The ability to use the capacity that these physicians have and they very much want to get back the business as usual.

Okay, Great and then also just one other comment on I.

I think I think you guys made and smart move.

But the the.

The ATM as opposed to of more traditional financing can I think I just wanted to commend you on that so thanks, a lot and and I look forward to two of the rollout of the <unk> system. Thanks.

Thanks, Mike I appreciate your support.

Our next question comes from the line of Brian grab it.

With the proceed with your question.

Hi, guys and congratulations on.

All of the accomplishments that you had over the past quarter.

And.

I had a few questions for you the.

The first one.

Considering that.

And you've got approval on the U S and Europe were you surprised by the additional questions from Canada.

Oh yeah.

No not at all Brian. Thanks for the question I think you know every every country has their own regulatory system and the requirements.

And it's the first time.

And I.

You know that health, Canada has seen any information on the <unk> system, So I think and similarly and in the EU as well as FDA, it's pretty common to get and clarifying questions.

Along the the review process.

<unk>, it's not out of the ordinary the questions frankly, you're all good and good clarifications and and.

So we're pleased with where we are and the process.

Okay. Thank you.

East growth broadly about the non dermatology area.

So and.

And that's the first that I've.

Heard of that after being on most of your conference calls or can you lend any insight into kind of what you saw the made you give such a broad list.

Sure so.

I think where this stems from is and and I would say you know early on and and the company's history.

I'm not sure how long you've been following US are on these calls, but certainly in the and the early days, we spoke a lot of doubt and I think we continue to speak about how.

How we believe that NPS and <unk>.

<unk> system is really it's really a platform technology and energy modality.

And that has.

Highly differentiated and.

The mechanism of action that could be useful across a broad range of tissue types now.

And we've gone into dermatology first.

And for a lot of what we think are very good reasons in terms of the applicability of the technology and skin as well as the dermatology market.

But the more we learn about.

The impact or the mechanism of.

Of our technology.

In tissue and particular and cellular tissue.

And how it does not affect acellular structures.

The more and more excited and we become about the potential and other application areas and just like.

Older energy modalities for.

And for example of thermal based modality is like.

Like radiofrequency or or microwave.

They're broadly used throughout the body, so they're used to some extent and skin, but but as im sure youre aware of their used broadly and other applications and so we think M. P S and our self X system.

Exactly that.

Same potential which is to be utilized across many applications throughout the body.

And in some we think are going to fit right into this.

The mechanism of action that we have again being non thermal cell focused and and.

And not impacting.

<unk> cellular structures. So we're very excited about it I think you know as we are.

Executing on our controlled launch and we thought it appropriate to you know to start to mention that we have been doing some clinical work in this area and we will continue to do so and as I mentioned and the in the.

Scripted.

Part of the call I mean, the these do not go without risks. So you know like anything we're approaching them.

The first pre clinically so that we can learn more and then we'll continue to move forward as we see the good data that comes out of it so and that's kind of how you know.

That has come about and where we're at with it.

Thank you and my last question Darrin is for you.

Do you see any similarities between your time and computer motion and your time it.

So kind of lessons that you learned from acute.

Computer motion that all.

And our applicable of the pulse or this just kind of a broad and new technology being adopted or yeah.

Yeah, Yeah, that's a really good question I know that.

With a lot of our investors.

The investors and analysts that we've spoken to you I've often drawn parallels between.

Queen.

Both computer and ocean and intuitive surgical.

Specifically surgical robotics.

And pulse Biosciences, and this new nano pulse stimulation technology I think in both cases, you have these very powerful and broad.

Broad platform technologies.

And I think what you saw on surgical robotics was.

There was a good number of years, where they looked for what is the appropriate application for robotics to make its place.

And ultimately.

And that ended up being urology and then it expanded from there.

I think what I learned from that experience was exactly that which is when you're out of a platform technology.

It's critically important that you identify that initial application area of that initial market and that you focus on that but then begin to build the pipeline. So that you can apply that platform to other.

And as as you move on and and our successful and that initial application area and so I think that's what we've done here and I would also mentioned that.

Our chairman Bob Duggan as you May well know was the.

The CEO of computer motion when it was acquired by intuitive surgical so.

He has lived through that.

Experience as well and together I think we both see many parallels and have tried to.

Take the learnings from that experience and really apply it to what we're doing here of pulse biosciences.

Do you see of parallel and revenue potential.

I think we have a huge opportunity in front of us.

At pulse Biosciences, and there are a lot of applications and.

Think we're we're very optimistic and so but we've got to start we're starting which is dermatology. We were very excited about that opportunity, we think it's big and.

And there are a number that I think could come behind it.

Good.

And the equally.

He is exciting.

But Terry risks just like anything else so.

Our job today is to really focus on our on our dermatology application area.

Drive this controlled launch and and the full launch into dermatology and.

And at the same time continue to explore these out.

The application areas and and and like we say keep our eyes open and and make sure we're making good decisions along the way.

Okay, congratulations on the great quarter.

Thanks, a lot Brian appreciate it.

Ladies and gentlemen, we have reached the end of today's question and answer session I would like to turn this call back over to.

The other area and you go for closing remarks.

Thanks, operator, and thank you everybody for your support and for joining us on the call today, we look forward to next quarter's call. Thank you.

This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and enjoy the rest of your evening.

Okay.

[music].

Okay.

[music].

And.

[music].

Yes.

[music].

Uh huh.

[music].

Yeah.

[music].