Q2 2021 Pulse Biosciences Inc Earnings Call
Greetings and welcome to pulse Biosciences second quarter 2021 earnings conference call. At this time all participants are in a listen only mode. A 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.
I'd now like to turn the conference over to your host Philip Taylor Investor Relations.
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 August 9.2021, only and will include forward looking statements and opinion statements, including predictions estimates expectations and other 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 the SEC's web.
Right.
You are cautioned not to place undue reliance on forward looking statements, we disclaim any obligation to update or revise these forward looking statements.
We'll 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.
Please 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.
Hello, and thank you all for joining us this afternoon.
On today's call I will share with you our key accomplishments and business updates from the second quarter that have positioned us for success as we begin the second half of the year. Ed will then provide details from the field on the status of our controlled commercial launch.
Andy will share our detailed financial results and then I will conclude and open up the call for a question to answer session.
Our goal at pulse Biosciences has always been to offer bioelectric medical solutions that deliver clinically differentiated outcomes for unmet needs of patients and clinicians.
As of the first quarter of 2021 the commercial launch on the self ex system is underway and we are in the process of implementing our technology and select leading aesthetic dermatology clinics, we continue to build on the positive momentum from previous quarters and are excited by the progress of our interactive and collaborative controlled launch program with clinicians.
We ended the second quarter with 49 clinics participating in the controlled launch following on boarding 34, new clinics across the U S Europe and Canada during the quarter.
We are on track to complete on boarding for the program in the third quarter and at this point, we believe up to 80 participating clinics will enable us to achieve our controlled launch program objectives.
Clinics are actively treating patients in the transition of clinics from controlled launch to <unk>.
I'll use by opting to acquire the self ex system. After completing a controlled launch program has recently begun.
Another highlight in the quarter was the receipt of health, Canada approval from the self ex system.
We're very pleased that we now have received approval in the 3 key geographies, we targeted for initial commercialization.
Our team was prepared to expand the controlled launch into this geography quickly and.
We now have our first Canadian control box participant performing self ex procedures.
To remind you on our first quarter earnings call, we laid out 2 priorities for the year. These include execution of the controlled launch program for the self ex system with the goal of driving adoption among key opinion leaders or kols within a static dermatology.
Our second corporate objective for 2020, 1 is to continue to expand the selloff ex systems applications in the U S to take full advantage of the diverse benefits of nano pulse stimulation technology.
We continue to make progress on both the clinical and regulatory fronts and I'm confident in our team's ability to deliver on this objective overtime.
Before we dive deeper into these objectives I would like to take the opportunity to inform and remind our listeners today about our technology technologies novel and proprietary capabilities and what differentiates ourself ex just on the over what is currently available for clinics and their patients.
Self ex system is a multi application platform, which delivers our proprietary nano pulse stimulation or N P. S technology.
N P S isn't nanosecond pulse non thermal energy based modality that directly affects cellular structures sparing the non cellular collagen rich dermis of the skin.
When compared to other thermal modalities currently on the market. We believe our self focused N. P. S technology provides improved lesion clearance with beneficial aesthetic outcomes.
The self ex system is a software enabled cloud integrated tunable console the powers of handheld treatment applicator with highly customizable configurations of treatment applicators and N. P. S energy settings physicians are able to treat a wide range of dermatological conditions in accordance with the needs and wants of their patients with procedure session.
Times as quick as 15 minutes to fit into the clinic workflow.
Integrated into the self ex system is our proprietary cloud connected software at the links to the system to our cloud based internal resources. We have named this cloud enabled infrastructure self ex cloud connect this development is the backbone of our innovative utilization based business model aligning our interests with those of our physician customers and their patients.
Ill effects cloud connect offers clinics and array of services that integrates the selloff ex system, our ecommerce customer portal and practice management tools to track utilization data and other metrics.
Having the software connected to our internal customer relationship management system and enterprise resource planning system provides us and the clinics with crucial insights into the productivity and profitability of the self ex system.
Circling back to our top priority for the year.
Self ex controlled launch program.
The controlled launch was initiated in the U S and in Europe. During the first quarter of 2020.1 following FDA clearance on the receipt of the CE Mark the methodical and calculated the introduction of our system to the market paired with the feedback we received from clinicians will shape. The long term success and broad adoption of the self ex system not only for our currently approved.
Applications, but also for those currently being developed.
Our experienced team has a thorough understanding of the aesthetic dermatology market and we incorporated our shared knowledge into best practices for introduction of herself ex system into the market.
The goal of the controlled launch program is to provide patients with exceptional experiences tracking their progress from the initial procedure to resolution of the treated lesion and a positive cosmetic outcome in order to fine tune, our on boarding and treatment process.
Planned, we're partnering with top aesthetic dermatology kols throughout the controlled launch and are collecting their critical feedback on the integration of the self ex system until if ex cloud connect into their practices and the experiences of their patients.
Following the completion of the controlled launch we anticipate these kols will become trusted advocates of the self ex system itself ex cloud connect infrastructure promoting the adoption of our technology among their peers.
Participating clinics in our controlled launch program were carefully selected and our partnership represent mutual investments from damage and pulse Biosciences and exchange for data gathered throughout the controlled launch program clinics will earn incremental credits towards the cost of the self ex system shipped to them for use in the program.
The time invested by these clinics on numerous virtual and practical training sessions indicates their level of commitment to becoming self ex system franchises and introducing the benefits of N P S to patients.
On our first quarter call. We had outlined that are original estimate was that it would take clinics on average approximately 3 months to complete the controlled launch commitment.
We are finding that our initial controlled launch clinics or taking a batched approach treating an initial cohort of patients and then evaluating the healing process followed by a second group of patients and so on.
With each group of patients physicians are applying their experience in patient and lesion selection and building confidence helping to refine a clear set of best practices from the introduction of this novel energy modality.
As a result, our initial clinics are taking approximately 5 months to complete the controlled launch process that said, we are seeing that clinics coming into the program more recently are benefiting from the learnings and experience of the early clinics and so we expect these clinics will complete the program closer to the original 3 month estimate.
We continue to be on track for the majority of clinics to complete the program by the end of 2020, 1 and to begin our initial commercial sales in the fourth quarter.
Overall the feedback we have received we have received with the controlled launch program has been positive.
We are receiving consistent feedback that her training program is among the best that clinics are experienced for a new technology introduction and the physician and patient experience continues to improve as we work through our clinic partners.
I'll, let Ed provide a more detailed update on the mechanics of the launch in a few moments.
I will now turn to our other priority for the year the advancement of specific applications for a self ex system on the research and regulatory fronts.
Our system is approved for Jim or general Dermatologic procedures in the United States.
As we have stated previously we have implemented a stepwise regulatory strategy in the U S under which we are pursuing specific indications for high value applications.
First specific indications for the treatment of sebaceous hyperplasia, a small benign lesion that develops primarily on the face and currently lacks acceptable treatment options with desirable aesthetic outcomes.
During the first quarter, we concluded follow up of 60 patients and an F. D. A I D approved comparative study comparing the use of the self ex system against electro desiccation treat sebaceous hyperplasia and began the data analysis process.
While we plan to file a 5.10-K by this time, we are still completing the necessary the necessary steps to do so.
So this idea approved study FDA requested a number of safety and efficacy endpoints, including a blinded independent review by 3 dermatologists using photographic images of the treated lesions.
Costs of developing this blinded photographic review can only occur after all the patient follow up is completed and its subsequent analysis continues we anticipate to have any analysis completed this quarter and expect to pursue a 5.10-K submission at that time.
The second specific indication we are targeting is for cutaneous non genital warts. We have enrolled 127 of 150 patients and expect to complete enrollment in our F. D. A I D approved pivotal comparison study this quarter we.
We continue to plan for a 5.10-K submission for this indication as early as the end of 2021 or possibly early 'twenty 'twenty 2 depending on follow up timelines feedback.
Feedback from clinicians on work procedures using the self ex system has been extremely positive. We continue to believe this is an exciting application.
We will continue to pursue additional benign lesions to grow the self ex systems. The application portfolio, we'll focus our efforts on applications that can be achieved through a single specific indications, which provides clinics greater flexibility to market such applications to their patients. We have early data sets for a number of additional benign lesions, including share in Goma NEVA.
Or come in malls and acne.
Is there from an portfolio expands we are targeting the most prevalent and compelling lesions order to realize the true potential of the self ex platform and maximize the value of N. P. S technology.
So there are clinical and regulatory works to be done before we were able to commercially launch. These applications. We believe it is beneficial to our patients to invest our resources towards these applications.
We look forward to providing more detailed timelines for these benign lesions as we approach clinical regulatory and commercial milestones.
Outside of or benign lesion pipeline. We're also happy to update that we have enrolled 18 of 30 patients at our F. D. E. F D. A I D approved treat and Resect basal cell carcinoma feasibility study.
It's on track for enrollment to be completed by the end of the third quarter.
Basal cell carcinoma, or BCC is the most frequently occurring form of cancer in the U S. With an estimated 3.6 million diagnosed cases every year. According to the skin cancer Foundation.
Current treatment of B C. C is wide margin surgical excision, which often results in undesirable scarring.
We believe that N P. S technology in the self ex system can be used to treat smaller BCC lesions with improved outcomes in cosmetically sensitive areas such as on the face.
We believe that this new application would be beneficial to a large number of patients and we look forward to addressing the unmet needs with the current standard of care is unable to meet.
The goal of the feasibility study is to demonstrate that the self ex system can safely be used to eliminate BCC lesions with potentially superior cosmetic outcome when compared to wide margin excision.
During the study BCC lesions will be treated with self ex system and approximately 60 days following the treatment treatment area will be examined for the cosmetic outcome.
And we'll then be ex size using the current standard of care wide margin excision procedure.
<unk> by the study pathologists to determine whether there are any remaining basal cells present in the treatment area. We believe that the study will yield the required evidence to support a follow on pivotal study in the first half of 'twenty 'twenty 2 that could then lead to a specific indication for the treatment of B C C. Using the self ex system.
We have demonstrated that M. P. S technology can be used across a wide range of applications. We believe that we have still only on lock a portion of its true potential we will always look to advance new therapies and applications for the seller self ex system to bring to patients. We are continually investing in the early development application areas in and outside of dermatology.
As we learned from our patients and clinicians we will use their feedback to support and inform our strategy.
Our development and clinical teams remain steadfast in their commitment to bringing our technology to patients and we will support them on all aspects of their endeavors through necessary investments I'm excited to give more details on these novel application areas throughout the remainder of the year potentially at an investor R&D day, which will have more robust information on our ever expanding application pipeline.
For more detail on the current rollout and initial learnings of the controlled launch program I will now turn the call over to Ed Evers.
Thank you Darrin I am very pleased to report we are making great progress with our controlled launch program and I'm excited to share the details with you today.
Following initial use of the cell tech system over 1000 procedures have been completed.
We're 49 participant in clinics across 3 geographies globally.
Key opinion leaders or Kols continue to add to our body of knowledge about the capabilities of our unique sales specific NPS technology for a wide variety of common lesions.
The scientific groundwork laid by the investigators who spearheaded the clinical research studies with a subtle effects systems did a tremendous job providing clear evidence that has been published in peer reviewed medical journals that support the unique safety and efficacy profile on MTS and clearing.
Our book to treat patients in a controlled clinical studies on it.
Our global controlled launch program is achieving our intended goals by providing real world validation of clinical and commercial best practices.
As well as the value of the salt ex system that they will share with the next wave of likely early adopters.
Our controlled launch experience with these leading aesthetic dermatology clinics around the world are setting the stage per transitioning to a broader commercial introduction.
Self ex system too early adopters of energy based technologies.
In the second quarter, we expanded the controlled launch initiative to selected Canadian key opinion leaders soon after receiving a medical device selections for the salt that system from health Canada.
Like our U S and European controlled launches our first Kols in Canada, we're poised to lead the way in their respective markets and provide their peers. The benefit of the early clinical and commercial experience working closely with our direct distribution sales team in Canada.
You may recall that the primary objective.
12 months is to ensure early positive patient and physician experiences and to establish clinical and commercial best practices for each region as we prepare to scale up the commercial implementation on Celtics till the first wave of early adopters and each global region.
Our commercial teams experience and extensive primary marketing research has shown that in the aesthetic procedure specialty market.
The acceptance and adoption of a new energy modality like the self ex system.
Is dramatically accelerated by the trusted influences of key opinion leaders in their respective geographies.
Positive care, while experiences build a foundation for the next phase of our commercial rollout when we transition from a controlled launch to prospecting. The next wave of commercial early adopters.
This next phase, we expect that the trusted advice and influence on.
Controlled launch participant Kols and their best practices guidance, establishing this controlled launch program will solidify the clinical and commercial foundation for the adoption and the subsequent commercial success moving to grow some opex franchises and these high end the stomach practices.
The mutual investment on time and resources is representative of our partnership and commitment to offering patients a unique procedure that addresses common skin conditions, but I'm not willing to rest by older technology modalities.
From a tactical perspective, our early experience in on boarding leading dermatologists has offered a wealth of knowledge that has accelerated our refinement of commercial processes internally.
And that accommodates the needs of clinics as we scale up our commercial launch team.
On boarding on new physician customers typically includes the entire staff at a clinic and includes a detailed overview of the self ex procedure and.
In M. P. S technology, followed by adaptive sessions and learning modules on the mechanism of action as.
As long as the operation of the system and self ex cloud connect software.
Just as importantly, our team was able to share the key learnings with respect to dermatologists and encourage direct peer to peer communications.
As you might imagine these peer to peer communications are powerful accelerant for the viral adoption of a paradigm changing technology like the self ex system.
Our experience with the early controlled launch sites that are selected kols gradually ramp up their first quarter patience and directly observed lesion clearance and skin healing.
Our clinical and commercial team closely collaborate with our controlled launch sites to accelerate the mutual learning curve.
And share has had experience with their peers and colleagues to refine and optimize both clinical and commercial best practices as we prepare to scale up for broader commercial usage.
This evolution of a learning curve for newly implemented site has allowed us to ramp up the learning curve with more recently on boarded controlled launch sites as we optimize our training curriculum.
Controlled launch participants who were on boarded more recently are progressing through their initial patients more quickly.
We see this acceleration is a clear indication of the value of our controlled launch program that greatly enhances the success of a broader scale up of our commercial activity.
Looking to the future as we complete on boarding other remaining controlled launch participants there will be an organic progression into a broader commercial launch contract for the fourth quarter involving selling our technology to early adopters stuff, we have identified as well as fielding inbound interest that our kols would generate through their payer networks.
This gradual transition to a broader lunch will leverage the experience of controlled launch participants, which will be bolstered by their willingness to share their experience with peers.
Yeah.
In parallel with our controlled launch we continue to build on our scientific foundation at major meetings with key opinion leaders in dermatology and aesthetic medicine.
As you know our engagement in the scientific community has always been a poorly for pulse biosciences, and we're especially excited that a controlled launch participants will have live in person venues to discuss the recent experiences together.
Our first is next week on meeting called scale, which stands for the symposium for cosmetic and laser education.
And several of our controlled launch participants are among the faculty of this meeting.
This scale meeting is code record by Dr. Michael Goldberg, who will be covering the differentiated benefits of NPS technology from the podium and by Doctor, Brian Breitzman, both of whom are participants in our controlled launch program.
Dr punishment is the lead investigator of our soon from our clinical study feasibility study and will be presenting clinical data results of that feasibility study in October I think.
Annual meeting of the American Society for Dermatologic surgery, or a S. D S.
Bindmans live podium presentation of the share in Goma study results will appear in the best of cosmetic oral abstract session at the a S. D S.
Yeah.
At the same scale meeting we're also looking forward to our sponsored sessions and which Doctor Vic Ross on Scripps clinic in San Diego and Dr. Joel Cohen of about skin dermatology in Denver, Colorado will be taking attendees on a deep dive of the importance of cell specificity.
And what makes N P S technology non thermal to further drive home how the uniqueness of our technology can change the way instead of physicians address benign lesions.
Just a few days prior to the meeting Dr. Thomas Rohrer on skin care physicians on Boston, Massachusetts, and past President of the American Society for lasers, and medicine and surgery will be on the virtual podium discussing NPS technology at the controversies and conversations in laser and cosmetic surgery.
Which is an advanced annual symposium.
In the area of published clinical research. We are pleased to share that clinical results of M. P. S technology from the treatment of non genital cutaneous warts was published in the May issue of lasers in surgery and medicine.
Which is the peer reviewed journal on the American Society for lasers, and medicine and surgery.
This clinical publication of our pivotal multicenter Wart study reports the high efficacy of M. P. S to clear common non jumbo warts by 60 days with.
With the majority of words clearing with 1 and sometimes 2 procedures.
Almost half of the words treated in the study, where we concentrated meaning that they had been treated in the past with other traditional methods.
Failed these car modalities.
In the 120 day observation period of study none of the cleared works Henry Curt, which is a big advantage for the self ex procedure.
In summary, our progress with the controlled launch program combined with our focus on continuing to build on the clinical data on the use of the self ex system to expand applications positions us well to offer a leading solution for unmet needs of patients.
And dermatologists worldwide and propel our future growth.
I will now turn the call over to Sandy. Thank you.
Thank you Ed.
Second quarter of 2021 operating expenses were $14.8 million.
<unk> $211.4 million for the prior year period, an approximate 3.5 million dollar increase year over year.
Operating expenses for the 3 months ended June 30, 2021 and June 30, 'twenty 'twenty included $2.4 million of noncash stock based compensation.
The year over year increase in operating expenses was primarily driven by the expansion of commercial and operational infrastructure, including increased head count 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.
Search and development personnel as well as clinical trials and consulting costs related to the design development and enhancement of our potential future products.
Non-GAAP research and development expenses increased by approximately $1.5 million to $6.4 million for the 3 months period ended June 32021 from $4.9 million. During the same period in 2020, primarily due to increases in personnel.
<unk> facility related costs, he consulting and outside services in support of our FDA submissions and new application development.
That incrementally elevated research and development expenses compared to the prior year period to remain at approximately these levels for the remainder of the year as we continue to invest in cell effects system application expansion initiatives.
Sales and marketing expenses consist of salaries and related expenses for commercial personnel, including marketing and commercial operating operations as well as professional fees tradeshows sponsorships and other promotional activity.
I had to receiving FDA clearance and CE, Mark and health, Canada approval from the sell off system sales and marketing expenses were included in general and administrative operating expense at <unk>.
Non-GAAP sales and marketing expenses increased by approximately $1.4 million to $2.6 million for the 3 month period ended June 32021 from $1.2 million. During the same period in 2020, primarily related to increased personnel and consulting.
And outside services to support commercialization activity not conducted in 2020.
Sales and marketing expenses for the 3 months period ended June 30, 'twenty 'twenty..1 also included approximately $400000 on noncash expenses related to the controlled launch on the Solas ex system.
We expect sales and marketing expenses will continue to incrementally increase throughout the year as we invest in activities to support broad commercial operating operations, including the controlled launch on the sell off ex system.
General and administrative expenses consist of salaries and related employee expenses per executives finance legal human resources information technology and administrative personnel as well as professional fees patent season costs insurance costs and other General Corp.
<unk> expenses.
Non-GAAP general and administrative expenses increased by approximately $500000 to $3 million for the 3 months period ended June 30, 2021 from $2.5 million. During the same period in 2020, primarily related to increases in personnel facility.
Related costs and directors and officers insurance.
Non-GAAP net loss for the second quarter of 2021 was $12.6 million.
Parents on net loss of $8.6 million from the second quarter ended June 32020.
Cash cash equivalents and investments totaled $47.4 million as of June 30, 2021 compared to $59.9 million as of March 31, 2021 cash used in the second quarter of 2021 with $15 million.
Excluding net proceeds received under the aftermarket or ATM equity offering program.
Cash used in the second quarter of 'twenty 'twenty..1 included the payment of $2.5 million to our chairman Robert jogging in accordance with the terms of the May 2020 letter agreement whereby Mr. Doug on provided indemnity coverage on substantially the same terms as our prior year director.
And officers liability insurance program.
On June 30, 2021 we also strengthened our balance sheet through a $50 million common stock private placement with Mr. Dugan.
Private placement.
They stink wished net of the principal balance and accrued and unpaid interest of the March 2021term loan.
Well as the investment of $8.4 million of new capital.
$8.4 million of New capital was received in July and therefore is not reflected in our cash balance of $47.4 million as of June 30, 2021, but instead is recorded as a related party receivable at the end of the period.
We will continue to use our best discretion and authorizing distribution of shares under the ATM program.
During the 3 month period ended June 30, 2021 we issued and sold 130748 shares of common stock under the ATM.
During the 6 month period ended June 30, 2021 we issued and sold a total of 288490 shares of common stock under the ATM. This.
The shares were sold at a weighted average price of $27.73 per share for aggregate net proceeds of approximately $7.8 million after deducting sales commissions and offering costs.
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, Inc. Conducting additional studies to support indication expansion with the F D. A.
Inventories were $2.7 million at June 30, 2021we.
We remain focused on our controlled launch strategy and its implementation through calculated investments to drive long term adoption and growth as.
As such incremental revenue generating systems will come on line throughout the back half of the year our systems transition to commercial use following completion of controlled launch program commitments.
Reflective of this cadence revenue in 2021 will be weighted to the fourth quarter as we anticipate initial commercial utilization as well as system sales in the 2 the first wave of early adopters.
Now I'll turn the call back to Darrin.
Thank you Sandy.
This is an exciting time for pulse biosciences, as we were entering the third quarter of our controlled launch program. That's.
As part of the program are participating clinicians are learning more about our technology every day and we are actively supporting them in any way we can.
The initial feedback on what you've received from our Kols. So far into the rollout has been incredibly positive and we are looking forward to hearing additional success stories in the coming months.
We have begun the commercial transition of select sites, marking an immense milestone for pulse biosciences on our journey to recording our first revenues and broader commercialization in the fourth quarter.
The positive clinical data that continues to come and reinforces our commitment to developing new applications for the self ex system for the benefit of our patients.
We are capitalizing on the strong momentum that we have gained within the last few quarters and we are well on our way to establishing widespread adoption and utilization of the self ex system and NPS technology and towards our mission of building a viable company.
Joining me now for Q&A are at Evers, Executive Vice President and General manager Dermatology, and Sandy Gardiner Executive Vice President and Chief Financial Officer, Operator, Please open the call for questions.
Thank you.
And I'll be conducting a question and answer session. If you would like to ask a question. Please press star 1 on your telephone keypad and of course on a confirmation tone will indicate that your line is on the question queue.
You may remove your question from the queue by pressing star 2.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, 1 moment, please where we pull for questions.
Yeah.
Our first question is from Chris Cooley with Stephens. Please proceed.
Good afternoon, and thank you for taking my questions and congratulations on the continued progress there with the Filofax system.
Just 2 from me.
Just 2 from me here at the outset.
I appreciate the additional color you provided about the ramp up.
Of your Kols sites, and that's leading to the 5 months versus the initial 3 months conversion time.
I'm curious, though if you could maybe go a little bit deeper there in terms of the types of lesions, where they're initially utilizing the system and if theres any variability.
There in terms of just.
The initial usage on the wait time, and we think about indications for use and then maybe that could then help us kind of better understand how these additional protocols and early learnings would apply to the second wave of of adopters.
And then it's just a quick follow on on if I may or per Sandi.
I'm not sure if you're willing to do this at this juncture, but.
Any additional color that you could provide in terms of the expectations for the EU commercial team build out.
Either in terms of the scope of that but also.
The related costs, and just kind of a timing on that build out would be greatly appreciated. Thank you.
Thanks, Chris those are great questions. So let me jump in with number 1 and this is Darren and I'll start off and then on.
I'll, probably hand, it over to Ed to add some additional color and so.
Your question is on sort of a ramp up and what we've seen in the controlled launch in terms of lesions being treated.
And how we think that's going to get a carry forward. So yeah.
Yeah, I think it's you know the controlled launch has gone very much as we anticipated in terms of.
Clinics experiencing this technology for you know for the very first time in a commercial setting and so as you know and we have quite a bit of clinical data and we have peer reviewed publications.
In the treatment of sebaceous hyperplasia.
On February 8 keratosis and as we discussed on the call. Today are also cutaneous on general wards and so as controlled launch sites.
You know started up the initial sites those were really the lesions debt.
They predominantly we're looking to treat so largely treating lesions that debt. We have clinical data that's published on and that lends itself well to the mechanism of action of our technical of our NPS technology on the self ex system and so from a.
Elysian perspective, those are the things that they initially focused on.
From a timing perspective, I think you can probably imagine net.
These early clinics.
What patients then began to treat these lesions and then followed those patients both for lesion clearance, but ultimately the healing of those treatments and and how they resolved over time and I think the thing we've observed is that these initial sites.
And really we're thoughtful and methodical in terms of how they batched and treat those patients.
And treated our first group of patients followed those patients over maybe 30% to 45 days and then treated our next set of patients and so that whole process. You know kind of led to the initial clinics sort of taking around this maybe 5 months period of time to get through the control.
Launch.
Graham as we've sort of set it up.
And as I mentioned in the prepared remarks.
Now expect did that and we're seeing it today that timeline is accelerating and so it's sort of this transition from clinical use.
Into you know first kind of commercial use.
Then the dirt and then the early adopters are in the first commercial use those clinics really want to see and observe.
These patients very carefully as they're sort of the first ones out of the gate with the technology and so and so that's what we're seeing and and I think we appreciate our clinics and their desire to take that kind of an approach and we're working very closely with them on a day to day basis.
And again, we've steadily seen as we brought on more clinics and and again, we brought on 34 clinics in the second quarter.
Those clinics are certainly moving more rapidly based on all of the learnings that we've had along the way. So I think that's sort of what we're seeing we think it will continue we think you know the elite the lesions that I talked about in terms of where we have our clinical data is where we will continue to see them.
Good utilization that being said you know on a on pretty much on weekly basis and physicians that are using the technology are bringing up new applications that they're very be we'd be very excited about them and want us to partner with and generate clinical data on so there's a lot of activity in terms of new.
Applications, and where physicians would like to see US go in terms of new technology.
And let me just ask Ed and if there's anything you'd like to add on top of that.
And I think he might be on mute.
Yeah from the very.
Yeah on.
From the very beginning we recognized that our mechanism of action to target cells.
Would lead to these initial applications, but also would cause sufficient physicians to leap to other types of lesions that have the same kind of architecture that is composed of cells that sit on top of the dermis. So as soon as they're developed confidence with our initial lesions. They quickly went to other difficult to address <unk>.
And are seeing the same type of mechanism of action benefits are with these other kinds of solutions that we saw with the top 3 that we've done the studies. So we expect more of that in the future again as we anticipated with our mechanism mechanism.
Action based on.
Messaging.
And then Chris the second question I think I'll hand that 1 over to sandy in terms of the European build out.
Yes.
Hey, Darrin.
During the course.
The 6 months that we've gone so far this year, we've largely built out the European team, we have approximately 7 individuals on in.
Europe on across the commercial organization that includes the leader as well as the clinical application specialists the ones that would be driving utilization.
And this is across the major geographies that we're looking at Germany, France, Spain et cetera.
So for the rest of the year, we may add a couple more but I would say that with the 700 folks that we have at least 4 completion Uh huh.
This year and looking to turnkey from control launch the commercial launch we're largely back on so I don't see a major expansion there.
Because we didn't have the sales many of those positions in the first half of this year.
Thank you for that Colorado, I misunderstood I thought you were implying that you are accelerating there and in your comments my mistake.
That's on a great quarter.
Thanks, a lot Chris I appreciate it.
Our next question is from Anthony Vendetti with Maxim Group. Please proceed.
Thanks, I was wondering if we can give us an update on the F. D. A I D. Your approval for the feasibility study for BCC.
I know maybe I missed this in the beginning but you were going to enroll.
30 patients.
And is that still on schedule and is it.
Are you expecting completion of that by the end of <unk>.
Oh, Yeah, Hey, Anthony Yeah. Thanks. Good question, Yes, we are on track in that BCC study as I mentioned.
In the prepared remarks, we have now enrolled 18 patients.
Out of the total 30 am and we are on track to enroll those up to 30 patients by the end of the third quarter here.
Okay, and then and then the pivotal study.
It is is to follow and is that still scheduled for first half 'twenty 2 and any any more details on what that pivotal study may look like.
Yeah, well, we don't have any more detail right now I think you know our current our current plan is to first complete this feasibility study, which which as I mentioned has 30 patients.
The patients get an initial treatment and then theres an extrusion approximately 60 days later.
That tissue is analyzed by the study pathologists. So we will complete enrollment in the third quarter you.
You can imagine then at 60 days until that decision is done and then there'll be some time to analyze that tissue and so our estimate is still I think.
That in the in the first half of 2022, and we hope to start a pivotal trial in D. C now that being said.
Theres a lot between here and there in terms of completing the feasibility study and also collaborating with FDA on which we will certainly do is it'll be an additional our IDE approved study. So there is still work to be done with FDA, we have not talked about any of the parameters of a pivotal trial it.
This particular point, but where we're really.
You know we're excited about this particular application and you know the quick start that we have here on the feasibility study and there's a lot of interest with our all of our physicians that we're working with on this including all the controlled launch sites are really kind of excited to see how that application are progressing through the <unk>.
Tori and clinical process so.
It still looks like the first half of 2022.
But a lot of work to be done between now and then.
Good no. That's that's a great update and obviously, that's a large market as well as some of the ones that you said you're still.
Growing our pipeline for them, including including acne.
And an overactive benign growth caused by overactive sweat gland.
So I was just wondering are those still very much in the.
Early stage of sort of mapping out your strategy there or.
Is there any other.
Detail you can give on on some of those other markets.
Yeah. That's all yeah, great question. So so yeah I would say those are you know early in the process as you know we've done some early feasibility work in some of those things that you've mentioned.
And we're really sort of mapping our strategy and.
And beginning to talk to FDA about some of these additional applications and indications and I think what we're trying to do is.
And sort of as we.
Have kind of a regulatory and clinical milestones.
Upcoming around those or having for example on IV approved and then we can begin to share more detail on exactly what those studies look like.
How long, we think they'll progress and then what potentially comes after them like we've done with BCC, but we certainly have a number of other things sort of in the pipeline.
And we really do look forward to share in some of the milestones that will be coming with those in the not too distant future.
Okay, Great and then I guess just lastly.
It seems like everything's on track.
With the 75 Kols.
I know by the end of the year or before the end of the year expected to generate revenues.
Is there any any more.
Tell on the timing.
And in terms of the feedback that you're getting from the Kols.
Are there any tweaks that you're already making either to the protocol or or on the device in any way or anticipating to make or is it too early you're going to wait for the feedback from all 75.
Yeah, So Andy let.
Let me comment first just on the.
The kind of feedback we're getting on any any tweaks, we're making so I would I would generally say you know the feedback we're getting is great. I would say also we're learning stuff you know every day and every week and every month that we're in this controlled launch cost program and and those learnings are asserting our search.
Tim Lee.
Leading to us tweaking various things we're doing that includes training. It includes conversations with physicians around patient selection and lesion selection, yeah as you can probably imagine.
Over 50 clinics at this particular time and you know.
We work with some really talented physicians and you know they have new ideas and new thoughts about technique and different things that they would like to try and should drive based on the mechanism of action of our systems. So I think that confer.
Controlled launch program is all about that it's all about learning and tweaking as far as the system goes you know I would say largely no. We havent made any substantive changes to the system.
The system has been functioning really well are all of the systems in the field have operated.
Really well no issues with with anything as far as we're concerned so we have lots of ideas about how to improve things all the time, but.
But I think you know as far as that goes the controlled launch has been going very well on and we're taking all the feedback we get and putting it into new training programs and.
And in education programs and other so with regard to revenue I'll, let sandy jump in.
So and.
Prepared remarks, you've heard Darrin and say that we're starting now to see the transition from on.
The controlled launch planning participants into commercial so we'll start to see some of the utilization revenue from that and in the third quarter, but in terms of commercial revenue that would actually be heavily weighted towards the fourth quarter, we're still on track to begin.
Full commercial launch in the fourth quarter on this year.
Okay great.
Great.
A lot of good color, thanks, I'll jump back in the queue.
Yeah. Thanks Anthony.
Okay.
Our next question is from Sean Lee with H C. Wainwright. Please proceed.
Good afternoon, guys and thanks for taking my questions Congratulations great quarter, I'm, just maybe a little bit more on the upcoming 5.10-K applications for ex each in words. So I was wondering with the data analysis is expected to finalize this quarter and next quarter.
Would you be releasing some of those data ahead of.
Submissions.
Ahead of the submissions and most likely I'm not I mean, I think a lot of the data rollout follows you know the cadence of some of the meetings and some of the big meetings in this area.
I think as it relates to them.
Clinical data that's going to go on to a submission to FDA, it's typical to to get that to F. D E on and get that through the process before.
You know going out publicly with it.
Oh I see.
And my second question is on the educational side of things because it sounds like just building out the K on support and building out the educational side is very important for the broader commercialization of it.
I was wondering how what's the longer term plan of that beyond is it just going to be a cable on symposiums and talks at the key meetings or is there a larger plan on how to reach the smaller clinics, especially.
Yes, so excellent question and I'll, let me just come on quickly and then I'll hand, it over to Ed. So I think just 1 comment I'll make is.
We always as a company to be highly focused on physician and patient education and training. So it's our firm belief debt you know a technology like this which is a new technology into a market you know the key to success in the field and adopt.
And high rates of adoption.
Is all to do with education and training so we.
We will have an organization that will be highly focused on that we pride ourselves on our team being very.
Well trained and and and educators themselves in terms of the technology and what what they can do on the field with.
With the clinicians and their entire staff at these clinics. So I think we never see a scenario, where we would go away from doing that and it's obviously heavily weighted now on a controlled launch program.
And also this program is really all about helping us to.
To create those best practices around how we do training and education that field going forward.
So ed any any additional comments there.
Oh, just that we've had our first evidence of controlled launch sites submitting abstract based on the controlled launch experience at meetings.
Coming up later in this quarter. So that's certainly what can we had hoped for as part of this controlled launch is to see.
Increased trafficking in new data from something other than a controlled clinical trials, which is.
Really a good sign with a new energy based on technology. The other observation is that.
Physicians are really used to the world on zoom calls.
So the opportunity for us to connect physicians in the controlled launch both with each other.
Well as with prospective purchasers to convey their experiences is something that we plan on in the third and fourth quarter. So this cross fertilization. That's the whole point of the controlled launch is very much an on going growth stage of the company and something that our sales team is very used.
To to Catalyzing with with the controlled launch sites and the respective physicians that tend to fall on them. So I expect to see more of that in the coming quarters.
Thanks for the additional color on those helpful. That's all I have.
Alright, Thanks, a lot Sean.
Thank you ladies and gentlemen, we have reached the end of the question and answer session I would like to turn the call back to Jerry Zucker for closing remarks.
Thanks, operator, and thank you everybody for joining our call we very much appreciate the support always.
And the great questions and we look forward to our upcoming calls.
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