Q1 2021 Pulse Biosciences Inc Earnings Call
[music].
Greetings and welcome to the pulse Biosciences first quarter 2021 earnings conference call.
At this time all participants are in a listen only mode.
A brief question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host Philip Taylor. Thank you Sir 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 May 10, 2021, only and will include forward looking statements and opinions statements, including predictions estimates plans expectations and other <unk>.
Information actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are more fully described in our press release issued earlier today and in our filings with the Securities and Exchange Commission or 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, we disclaim any obligation to update or revise these forward looking statements. We will also.
Discuss certain non-GAAP financial measures disclosures regarding these non-GAAP financial measures, including reconciliations with the most comparable GAAP measures can be found in the press release.
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 everyone for joining us this afternoon at this exciting juncture for pulse Biosciences.
On today's call I'm pleased to discuss our recent accomplishments and business updates, including the commercial regulatory and clinical progress. We have made so far in 2021 Ed.
Ed will provide details from the field on our initial commercial experience with the self X system and Sandy will share of the first quarter 2021 financial results I will then conclude and we will open up the call for a question and answer session.
From the beginning of pulse Biosciences, our mission has been tough for bioelectric medical solutions that make meaningful differences for the betterment of patients and clinicians. This is now a reality in February we received FDA clearance to market our product the cell affects system with cloud connect services for use in dermatology.
10 days prior we had received CE mark regulatory approval to market the system in Europe.
[noise] achievements have advanced the company into our next chapter of growth.
In 2020, one we have two priorities that in form of current corporate strategy for.
Because from the top priorities are executing our controlled launch program to drive adoption of self X system utilization among key opinion, leading aesthetic dermatologists.
The set the foundation for a full commercial launch in late 'twenty or 'twenty, one into 2020, two and expanding the telematics system of commercial potential.
And to develop new applications that address the needs of patients.
We are confident that disciplined focus and resource allocation to these objectives will maximize the value of the self X system in the market over the long term.
Okay.
Before diving into the east priorities, specifically I would like to describe and remind everyone about the uniqueness of our technology and its opportunity to address unmet needs of clinicians and patients alike.
The self X system is a multi application platform that administers our proprietary nano pulse stimulation or N. P. S technology with unique benefits desirable for use in dermatologic procedures.
N P S isn't entirely new energy modality that delivers nanosecond pulse non thermal energy that affects only cellular structures, while leaving non cellular collagen rich skin tissue unharmed, which helps promote of better healing profile overall.
The differentiated cell focused mechanism of action of N. P. S has proven to be desirable in dermatology as it provides a set of skin specialists the ability to address common skin conditions that have generally been challenging to treat with current traditional methods. The.
The <unk> system is a software enabled tunable cloud integrated console with highly customizable configurations of applicators and energy levels to enable a wide range of procedural settings to address multiple dermatologic conditions.
Built into the self X system is our proprietary integrated cloud software infrastructure called the <unk> cloud connect it is the backbone of our innovative utilization based business model.
The interest of patients practices and the company and its the first of its kind of in for energy based medical devices.
Physicians are able to perform procedures and charging a per lesion basis without the constraints of physical of disposable cost and inventory burden as is the case with other medical device models.
It's all effects of cloud connect provides the novel suite of services that integrates the customer the system, our ecommerce customer portal and practice management tools to track utilization data and other metrics on the backend connecting to our internal customer relationship management system and enterprise resource planning system.
It is through the <unk> cloud connect suite of services that we were able to provide us net of practices key insights into the productivity and profitability of the yourself X franchise.
We are very excited about the initial feedback we are hearing from customers regarding the seamless integration of the <unk> system with cloud connect services into their practice. We believe this advanced delivery model will not only drive utilization of self ex procedures, but also will create a premier experience and growth potential for our valued physician customers and the.
For patients.
Turning to our main focus for the year execution of our control bus program I'd.
I'd like to discuss the benefits and advantages of our strategy for rolling out of novel technology to aesthetic dermatologists.
We are introducing the self X system to the U S and European markets through a deliberate and measured controlled launch program for team has developed and began to execute a thoughtful and the particle of commercial plan designed to ensure broad adoption and long term success for the use of our self X system minutes Tabetic dermatology the.
All of the control of box program is rooted in a deep understanding of the aesthetic dermatology market and best practices for introducing a novel technology into this market.
Our intention is to produce and document outstanding patient experiences by partnering with top Kols and implementing self X system best practices and their franchises.
Influential kols become trusted advocates of the self X system and N. P. S technology promoting the adoption of the new procedure among their peers. These partnerships also generate critical feedback, which can then be leveraged across our training and guidelines for other customers.
The control of launch program represents mutual investments by pulse Biosciences, and each participating clinic.
In exchange for qualitative data on all aspects of the first 40 patients they treat clinics will earn incremental credits towards the cost of their cell effects system.
These clinics have proven their commitment to starting cell effects system franchises by investing the time to complete multiple virtual and practical training programs.
Indicated excitement and a strong desire to educate and off of patient the benefits of N. P. S. It's.
As previously stated we were planning to include 75, leading aesthetic clinics across the U S and the EU in this program.
I'm very pleased to say the because of the experience in preparation by our team we were able to begin onboarding. The first clinics participating in the controlled launch program within weeks of self ex marketing clearances in both the U S. Andy Hugh we ended quarter, one with 15 of the controlled launch sites fully trained and beginning to treat pay.
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This is consistent with our plan debt. The majority approximately 45 to 55 clinics on boarded by the end of quarter two with the remaining in quarter three.
Ed will provide details on the early experience to date later in the call.
To remind you. We're also planning to expand our controlled launch into Canada pending health, Canada approval for the telematics system. We recently responded to what we believe is the final question from the Health, Canada reviewer and expect the review to be completed in the second quarter.
Now I will discuss our other top priority in 2021.
The progress ourself extra step of clinical application research and regulatory strategy, we believe that at of pulse stimulation technology delivered by the cells like system can be highly effective across multiple aesthetic dermatology applications and has the potential to be effective in additional therapeutic areas as well.
The fully realized and off of the full potential of the self X system to clinicians and patients investigational and clinical work is of high priority at pulse Biosciences and.
In the U S. We will expand beyond the current general indication for the sell of X system with the step wise regulatory strategy that includes pursuing specific indications for high value applications.
As we described previously the first specific indication we are pursuing is for the treatment of sebaceous hyperplasia.
The <unk> benign region. The of course, primarily on the face and of our clinicians lack a suitable treatment that provides durable lesion clearance within acceptable cosmetic outcome for patients. We believe the cell effects system can offer such of treatment for sebaceous hyperplasia and of executed an F. D. A idea of proved comparative study using the self X system and comparing it to <unk>.
Sector of desiccation.
We completed all treatments and follow up of patients in this study during the first quarter at this point we are in the final stages of preparing of five 10-K submission and expect the submission to go the F D. A within the next several weeks.
The second specific indication we are pursuing isn't cutaneous non genital warts, we continue to enroll and treat patients in our F. D. A I D approved pivotal comparison study.
We have treated 51 of 150 patients and expect to complete enrollment of the study as early as the end of the second quarter or early in the third quarter of 2021.
Given the timeline, we remain on track to use the data in the five 10-K submission to the FDA as early as the fourth quarter of 2021.
We plan to continue to expand applications and indications for specific benign lesions to drive utilization of the sale of X system and clinics, we will not pursue of specific indication for all applications, but we'll focus on those applications that can be benefited by a specific indication, which allows clinics the market directly for those indications to their patients.
We believe we have good clinical data and the number of additional benign lesions southern feasibility and others further along including separate keratosis share in goma knee bi and acne. It is our intention to maximize the value of the <unk> system for dermatologists by expanding its use among the most prevalent and compelling lesions to.
The M patients well.
Whether all of these potential applications will ultimately be launched commercially is dependent upon a number of factors that need further validation, but today. We believe these all represent compelling clinical applications that are worth the investment.
We will plan to provide more detailed timelines for these applications as they get closer to clinical regulatory and commercial milestones.
We're also pleased to report today, an important development in our broader application expansion strategy to pursue non benign lesions of about a week ago. We received the FDA IDE approval for a treat and resect basal cell carcinoma of feasibility study.
Basal cell carcinoma, or BCC is the most common form of skin cancer and the most frequently occurring for them of all cancers.
In the U S alone an estimated $3 6 million cases are diagnosed each year. According to the skin cancer Foundation.
The current standard of care is white Marsh surgical excision, which can result in noticeable scarring. We believe the sulfide system can provide a tissue sparing and cosmetically beneficial treatment for smaller BCC lesions and cosmetically sensitive areas such as the face and our scientific advisers believe this represents a compelling application for large <unk>.
Of their patients.
The objective of the feasibility studies to demonstrate the self X system can be used to eliminate the BCC lesion and to get an initial assessment of the cosmetic the outcome of the treatment.
In the study BCC lesions will be treated with the <unk> system approximately 60 days after treatment the treatment area will be assessed for cosmetic outcome and then the leisure will be of size using the standard of care wide margin excision.
Whose decision the tissue will be reviewed by the study pathologists to determine if there are any remaining basal cells in the treatment area.
We believe the study will provide sufficient evidence to support of your follow on pivotal study may lead to a specific indication for the treatment of B C. C C.
Feasibility study will begin enrollment this quarter and we expect to be fully enrolled with 30 patients by the end of quarter three.
If successful the pivotal study would follow in the first half of 2022.
We believe that the inherent nature of N T. S can provide benefits across different applications in health care.
And as we noted in our Q4 call we are constantly examining and expanding the therapeutic range of applications relevant to the south of X system and cloud connect platform.
We continue to invest in the early development of application areas outside of dermatology, leveraging the knowledge and experience we have gained.
We are planning to provide more detail of these application areas and our plans to pursue them in the second half of the year potentially in an investor R&D day. So that we can provide sufficient detail on our growing pipeline of applications.
As we have shown to this point of our development and clinical teams will remain committed to discovering and unlocking the full potential of our powerful technology and we will continue to support these expanded efforts with the required measured investments.
For more on our activity in clinics right now I will turn the call over to Ed Ebbers.
Thanks Darrin.
First of all I want to say it is just great for the growing commercial team of 15 nine in North America and six in Europe to be in the field in the U S and Europe, helping our first customers onboard the subtle effects controlled launch experience.
Our team is continuously gaining practical experience with both physicians and patients.
The anticipated warm reception for our unique cell specific technology among the Kols that's exceeded our expectations in the early going.
As intended our controlled launch of participants are contributing to our knowledge base on uses for the south of X system.
Our scientific advisors have done a great job setting a high bar for the clinical profile for NPS technology, and our first controlled launch participants are thrilled to now of kind of an advanced technology solution in hand that addresses unmet needs in aesthetic medicine offering this unique non thermal some opex for <unk>.
Ctrip for patients with lesions that are difficult to clear with older technologies that use heat or cold.
While our planned controlled launch experience is still in its very early stages with an initial group of Kols. We are pleased and excited to report on a controlled launch progress as well as our continued engagement with the scientific community with our clinical research projects in support of new applications for the seller platform.
As we have noted our experience in marketing research in the set of procedures specialty markets has shown that the acceptance and adoption of new energy modalities like the self X system is heavily impacted by the influence of key opinion leaders or kols.
Anesthetic medicine.
For that reason, we designed our controlled launch program to partner with these clinics and I'm sure very early positive clinician and patient experiences as we optimize the commercial learning for required for new cell effects system users.
In the future as we transition from a controlled launch to prospecting. The next wave of commercial early adopters we.
We expect that the trusted advice and influence of these controlled launch kols.
And the best practices guidance will be instrumental in laying the clinical and commercial foundation for the adoption and commercial success needed to grow of self X franchise and the.
These high end aesthetic practices.
Controlled launch success begins with disciplined physician selection.
In the months preceding the controlled launch we carefully selected and qualified for likely candidates for the current controlled launch participation based on established criteria, including past experience with new energy technologies that have made the jump from clinical trials to commercial yours.
Our goal was to narrow down our choices to 75 positions too.
The rollout the south of X system.
Our final selection of the first wave of other controlled launch participants was completed soon after regulatory clearances, we continued to qualify and move new controlled launch participants into our pipeline of <unk>.
Planned onboarding being implemented by our growing direct sales team.
The actual onboarding process for each controlled launch center begins with a comprehensive overview of the south of X procedure and MTS technology for the entire staff.
This is of the tactics session, which includes learning modules covering the mechanism of action clinical.
Clinical applications.
You shouldn't expectation management.
Local anesthetic administration techniques as well as the operation of the south of that system.
With a special emphasis on our e-commerce customer portal enabled by the <unk> cloud connect system that Darren spoke about.
This onboarding process can take a full day for the physicians and their staffs, which represents a significant investment for both pulse and the practice to ensure that the user and patient experience is carefully managed.
Since there are no comparable technologies to M. P S.
Worked for our non thermal mechanism of action, we strive to have our commercial team present for the initial patient procedures.
And the present for diligent patient follow up debt is conducted after each sort of ex procedure. So that's the position kind of directly observed skin tissue changes that are inherent to the lesion clearance process Inc.
Cooling observing the time it takes for the lesions to clear and how the healing process progresses overtime.
This direct observation of the lesion clearance and healing process helps the position and the staff better describe the some effects experience to meet your patience for the clear expectations kind of reset.
Since initiating our controlled launch in February we have onboard at 15 clinics by the end of the first quarter. We continue to expect it will take the clinics approximately three months to complete their initial 40 patient procedure commitment as establishing the controlled launch of protocol.
Imperative to this planned controlled launch process is taking feedback from the early control of them on sites and the patients.
And of applying this experience to newly onboard controlled launch sites.
Our expectations excels program provides for more patients and physician feedback data gathered during the controlled launch phase.
And uses that feedback to refine our educational content for future sessions with our controlled launch sites.
The major benefit of introducing a new paradigm changing platform like sort of effects with this carefully controlled and managed process. In this early stage is that the early feedback and fine tuning of the procedure experiences from the scale expertise greatly enhances our ability to deliver a consistent and.
Predictable clinical and commercial outcome as we scale up the current launch to the next wave of early adopters.
Unlike the structure of a controlled clinical trial it controlled commercial launch of new technology empowers expert physicians and the staff to optimize all aspects of managing the patients experience.
In parallel with our controlled launch are impressive and growing collection of peer reviewed publications in the major meeting podium presentations will continue to be critical and garnering the attention and potential purchasing interest of the next wave of early adopters.
Discussion of NPS technology delivered by the South of X system continues to have significant presence at major meetings of aesthetic procedure specialists.
This enforces the broad applicability of our south of specific non thermal energy modality.
Notably at the 2021 annual meeting of the American Society for lasers in the medicine and surgery or a S. L. M. S for different podium presentations on MTS will be delivered by the notable key opinion leaders.
First Dr. Bruce Katz of New York City, we presented interim results on our multicenter feasibility study for the treatment of moderate to severe back of pack of me.
Our next Doctor Joel Cohen of Denver, Colorado will discuss our feasibility study for commonly by generally known as malls.
And Dr. Suzanne Kilmer of Sacramento will report on optimize energy settings, and maintaining high efficacy and excellent skin recovery for sebaceous hyperplasia.
And finally, Dr. Ted line of Austin, Texas, what percent of the efficacy of clearing cutaneous non jumbo watch where the single cell effects for Ctrip.
Most recently at the 2021 virtual meeting of the American Academy of Dermatology, Dr. Tom Roar of the current president of the Inc.
L M S.
The consumer research with positive implications for the selloff ex procedure.
Yes.
The research highlights the aesthetic dermatology patients are highly motivated to seek the better and more durable solution for clearing common skin lesions.
And what place of higher value overall on a new procedure to clear lesions over other mainstream aesthetic procedures, such as botox poor dermal fillers.
With our controlled launch being faithfully executed by our growing and highly trained aesthetics specialty sales team and our parallel pursuit of new clinical data and applications. We will deliver the promise of the some effects system has a multiple application platform that will be embraced around.
For the World as we continue to advance for commercial launch plans as well as the new clinical applications that will feed our future commercial growth.
Thank you now and I will turn the call over to Sandy.
Thank you Anne.
For the first quarter of 2021 operating expenses were $18 $5 million compared to $12 million for the prior year period, an approximate $6 5 million dollar increase year over year.
Operating expenses for the three months ended March 31st 2021 included $7 million of noncash stock based compensation versus $2.6 million in the prior year period, representing $4.3 million or 66 per cent of the year over year increase.
And operating expenses the.
The additional year over year increase in operating expenses was primarily driven by the expansion of commercial and operational infrastructure.
Including increased headcount to support commercialization activity.
As I move into the discussion of our operating expenses I'll focus my comments on our adjusted or non-GAAP results to provide insights into the underlying trends in our business.
Please refer to today's press release for a detailed reconciliation of non-GAAP measures with the most comparable GAAP measures.
Research and development expenses consist of salaries and related expenses for manufacturing research and development personnel as well as clinical trials and consulting costs related to the design development and enhancement of our potential future products non.
Non-GAAP research and development expenses increased by approximately $600000 to $5.9 million for the three month period ended March 31st 2021 from $5.3 million. During the same period in 2020, primarily due to increases in personnel.
<unk> facility related costs, and consulting and outside services, Inc.
The part of our FDA submissions and new application development, all partially offset by reductions in clinical trial expenses sponsored research prototype material in devices and travel expenses from a year ago. We.
We expect the incrementally elevated research and development expenses compared to the prior year period to remain at approximately these levels for the year as we continue to invest in the cell effects system application expansion initiatives Darrin previously discussed.
Sales and marketing expenses consist of salaries and related employee expenses for commercial personnel, including marketing and commercial operations as well as professional fees tradeshows sponsorships and other promotional activities.
Prior to receiving FDA clearance and CE Mark approval for the solar system.
Marketing expenses were included in general and administrative operating expenses.
Non-GAAP sales and marketing expenses increased by approximately $1 million to $2 $4 million for the three months period ended March 31st 2021 from one point for a million dollars. During the same period in 2020, primarily related to increased personnel consulting and outside.
Services to support commercialization activities not conducted in 2020.
Sales and marketing expenses for the three months period March 31, 'twenty 'twenty. One also included $135000 of noncash expenses related to the controlled launch of the cell of X system.
We expect sales and marketing expenses will continue to incrementally increase throughout the year as we invest in activities to support broad commercial operations, including the controlled launch of the cell effects system.
General and administrative expenses consist of salaries and related employee expenses for executive finance legal human resources information technology and administrative personnel as well as professional fees patent season costs insurance costs and other general corporate expenses.
Non-GAAP general administrative expenses increased by approximately $600000 the $3 million for the three months period ended March 31st 2021 from $2.4 million. During the same period in 2020, primarily related to increases in personnel.
The facility related costs legal accounting other public company expenses interact during the officers insurance.
Non-GAAP net loss for the first quarter of 2021 was $11.4 million compared to a net loss of $9 million for the first quarter ended March 31 2020.
Cash cash equivalents and investments totaled $59 $9 million as of March 31st 'twenty, 'twenty, one compared to $25 million as of December 31st 2020 cash.
Cash used in the first quarter of 2021 was $10.7 million. Excluding net proceeds received under the at the market our ATM equity offering program term loan and the exercise of warrants.
On March 11th 2021 we strengthened our balance sheet for a $41 million term loan payable in June 'twenty 'twenty two.
We will continue to use our best discretion and the authorizing distribution of shares under the ATM program.
During the three months period ended March 31, 2021 we issued and sold 157742 shares of common stock under the ATM.
The shares were sold at an average price of $34 29 per share for aggregate net proceeds of approximately $5 million after deducting sales commissions and offering costs payable.
Cash usage will continue to increase incrementally as we invest in activities to support broad commercial operations, including building our commercial team in Europe, increasing inventory levels and conducting additional studies to support indication expansion with the F. D. A.
Inventories were $1 $1 million at March 31, 2021.
On the top line revenue generation will begin as each controlled launch clinic completes their 40 patient commitment and elect to take ownership of the cell effects of system.
As such incremental revenue generating systems will come online throughout the year of systems are implemented at practices and they complete initial procedures.
We remain focused on our controlled launch strategy and its implementation through calculated investments to drive long term adoption and growth.
Now I'll turn the call back to Darrin.
Thank you Sandy.
Over the past months, we have gained exciting momentum as the commercial organization.
We're executing our strategy to achieve regulatory approvals onboard kols as the initial control of lunch participants all while growing our library of positive clinical data to support current and future cell effects system applications.
Significant project progress made by the pulse Biosciences team is establishing a foundation from which we can drive widespread adoption and utilization of the sell up X system and the N P. S technology.
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 of.
Operator, please open the call for questions.
Thank you.
Ladies and gentlemen, we will now have for a question answer session.
If you'd like to ask a question. Please press star one on your telephone keypad of.
The confirmation tone will indicate that your line is from the question queue.
They also press star two if you'd like to remove your question from the queue.
One moment, please while we now poll for questions.
Our first question comes from Anthony Vendetti with Maxim Group. Please proceed with your question.
Thanks.
I was just wondering on the on the 15 Kols that are onboard now.
Have you.
Have you had any feedback in terms of the protocol or how the the patience.
The better.
<unk> treated by the 15 Kols any any update on all of that at this point, whereas the tour.
Hey, Anthony it's Darren.
Yeah. Thanks, Thanks for the question for for listening and so.
Yeah, we had 15 by the end of the first quarter. So that was sort of roughly mid February until the end of March and then we continued in this quarter and I.
I think overall like you heard from Ed and I'll, let Ed jump in here and just the second the free.
Feedback has been.
Very positive in terms of the whole program implementation of of the training them getting physicians and their staff up to speed.
Initial treatments of patients and.
You know I don't know if we mentioned in the script, but certainly all of the installations have treated patients.
At this point and and are moving forward. So it's been very positive. We're you know we're really pleased from an execution perspective.
Our ability to get the systems out to the clinics get them trained up and get them rolling So.
I think.
Thus far it's been great.
If you want to jump in and provide a little additional.
Color there.
Yeah, I'll add to that is that.
It really is a collaborative process between us and the physicians that we asked to participate in that with sort of understanding the rest of the beginning.
While we certainly had very successful clinical trials.
Those are far different clinical conditions than what one might encounter in everyday clinical practice in terms of of diversity of the lesions the diversity of patients.
So we really continue to learn from them on a daily basis.
And Inc.
In some ways they added to our understanding of the wide range of potential lesions that we believe are treatable and they are trading.
In ways that we weren't able to evaluate from clinical trials because of the diversity of patients of lesions that are they've allowed us to observe in the I get even steeper than our learning curve in terms of new lesions that we hadn't treated before.
Okay, Great and then and then did you say another 30 or 40 by the end of the second quarter. So that you'll be at 45 to 55 in total by the end of the second quarter.
Yeah, Yeah, that's right Anthony So we had 15 and then.
As I mentioned will probably be somewhere between 45 in the 55 of the end of this second quarter and then we'll finish it up in the third quarter in the U S and Europe.
Okay.
That's helpful and and so sebaceous hyperplasia.
Hyperplasia bite by end of second quarter should be submitted to the FDA and then did you say a non genital warts by the end of the year by the end of the four Q 'twenty one.
Yeah. So.
So that's right sebaceous hyperplasia of here in the next several weeks, we're just finishing up that 500 10-K, and then with cutaneous non genital warts, we expect enrollment to be cleaner to be completed kind of late this quarter. Early next and then that puts us and we think good position to get the 500 10-K in by the end of.
The year.
And then just an overall general question on on on revenues.
No. These are to out of the K wells, so theres not a lot of.
The near term revenues, because there's some they're going to be earning some of the.
Some of the ability to have the system by by providing the detailed feedback, but but some revenue generation by the third quarter is still is that still a feasible reasonable at this point.
Anthony of the Sandy.
So they'll come on line. After they have finished the of course, there for any patient commitment, but we continue to feel that net revenue will be minimal in the first three quarters.
It won't be until the fourth quarter that we would actually see accurate complete the controlled launch system and the process here that for them, we would expect additional commercial revenue.
Okay, and then and then in terms of commercialization just to stay on that before I turn it back over it at commercialization.
Could could happen.
In the fourth quarter, where you roll it out beyond the Kols if all of the Kols are on boarded by the end of the third quarter correct.
That is correct.
Okay, Great Alright, I'll I'll hop back in the queue. Thank you.
Thanks Anthony.
Thank you.
Our next question comes from Sean Kang with H C. Wainwright. Please proceed with your question.
Hi, Thank you for taking my question. So my first question is regarding Canadian market. So I'm first of all how large of the how big is the Kennedy of market and also if you obtain the Canadian approval on time.
You expand your current.
The control of lunch program to include the Canada.
Yeah.
Yeah, Let me, let me touch on the first part so.
So yeah as I mentioned.
In the prepared remarks, we've been in this process with health, Canada to gain approval for the <unk> system, we think that at the.
This point.
Based on guidance documents from health, Canada that we have answered the final question.
We're in sort of the of the final stage of the review so.
Given that we think the review will.
Complete before the end of the quarter just again based on.
Timing that isn't sort of their standard guidance.
So if if and if we get an approval at that time, then yes, we would expect to expand our controlled launch program.
Into Canada, it would be relatively small.
With regard to.
The additional number of of clinics of them I don't think we've.
Settled the on an exact number yet, but I think it would be relatively incrementally relatively small when compared to the U S. In Europe and in terms of sort of overall market Ed do you want to make any comments on that.
In terms of Canada.
Yeah the.
The rule of thumb is it's somewhere between one fifth of <unk>, one seventh of the U S. Total in the aesthetic market now having said that there are some very fine top key opinion leaders in Canada.
With whom we've already begun talking about their interest in participating with US also of hired.
The regional director based in Canada to manage those controlled launch sites with the same kind of high quality of that we've come to expect in Europe and the U S. So we're definitely locked and loaded and ready to roll with proven training programs are well trained person and physicians who are very enthusiastic about jumping in so we're very optimistic.
About our future of Canada.
I see that's helpful.
So one more question is regarding the basal cell carcinoma study. So would you say would you share any data from the study before you go go to a pivotal study.
Yeah. Thanks, Sean.
We'll see when we get there I mean, I think our intention is always to be very open and transparent with our clinical data.
It wouldn't I think.
Surprised anybody who's followed us to to see that we would have exposure to that data in scientific meetings if applicable.
So we would certainly look for opportunities to do that now. This is a you know this is an FDA approved study so.
We have to be respectful of how we use that data.
With the F D a.
For the pivotal study and in the public release of it but I think we've always.
Tried to get our clinical data out.
In scientific meetings as we are able as that day to get.
Finalized and as those meetings come around and our investigators desire to get published some of that information. So I think you can expect for us to you know to get that data out just as soon as we're able to do that.
And I think I did.
I didn't talk about it much during the prepared.
Paired remarks, but we're very pleased now this is our third IDE approved study with the FDA. So I think that's it.
Demonstration that we have a good collaboration with FDA.
And the studies I think.
As we sequence them through FDA and get their good collaboration and sort of agreement on the studies that we've been able to go from a couple of benign lesions as you know with sebaceous hyperplasia and cutaneous non general words, and now to something that is non benign.
And to get FDA approval for that study, we think is a real feather in our cap and speaks.
Very highly of our team of the.
The <unk> system, and our technology and our ability to to work with FDA on advancing the technology further into the clinic. So we're very pleased to be moving forward in this particular indication.
Okay. That's helpful. Thank you.
Alright, Thank you very much for your questions.
Thank you.
There are no further questions at this time I'd like to turn the floor back over to management for any closing remarks.
Yeah. Thank you very much operator, and thank you everybody for joining us on this very important update call. We're excited about where we are today with our controlled launch and and getting the cell effects system of out into the aesthetic dermatologists hands and we very much appreciate all of the support that we've received from all of them.
Our stakeholders and we continue to.
Moving forward on our strategy and get the cell effect system out into more and more applications. So thank you very much look forward to talking to you all soon.
Ladies and gentlemen. This concludes today's web conference you may now disconnect your lines at this time.
You for your participation and have a great day.
Yeah.