Pulse Biosciences Inc. Q1 2023 Earnings Call
Speaker 1: All the formal presentation. Should you require operator assistance during the conference, please press star zero to signal an operator. Please note this conference is being recorded.
Speaker 1: He will now turn the conference over to your host, Trip Taylor and Vesta Relations. Thank you, he may begin.
Speaker 2: 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 views as of today May 11th, 2023 only and will include forward looking statements and opinion statements, including predictions, estimates, plans, expectations and other information.
Speaker 2: 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. RSEC filings can be found on our website or on the SEC's website.
Speaker 2: Investors are cautioned not to place undue reliance on forward-looking statements. We disclaim any obligation to update or revise these forward-looking statements.
Speaker 2: We will also discuss certain non- GAAP financial measures. Disclosures regarding these non- GAAP financial measures, including reconcilations with the most comparable GAAP measures , can be found in the press release.
Speaker 2: Please note that this conference call will be available for audio replay on our website at PulsePyosciences.com on the news and events section on our Investor Relations page. With that, I would now like to turn the call over to President and Chief Executive Officer Kevin Danna-Heat.
Speaker 3: Thank you, Trip. Good afternoon, everyone, and thank you all for joining us.
Speaker 3: On today's call, I'm excited to highlight a significant addition to our executive team, as well as discuss how the team plans to advance and achieve our corporate objectives.
Speaker 3: I will then turn the call over to our Chief Technology Officer, Darren Euker, to share updates regarding our product development and regulatory initiatives. Mike Coughler, Vice President of Finance, will review our first quarter financial results before I conclude and open the call for a question and answer session.
Speaker 3: I want to open this call by highlighting our leadership team.
Speaker 3: We are proud to have assembled a world-class team in organizational structure designed to accelerate and broaden the application of our innovative technologies.
Speaker 3: Just this month, we announced the appointment of Dr. Gandonatin as chief medical officer focused on our cardiothoracic application.
Speaker 3: Dr. Dunantin is a renowned cardiothoracic surgeon specializing in complex minimally invasive procedures.
Speaker 3: He is a leader in pioneering novel, less invasive technologies that improve the lives of patients with atrial fibrillation. Dr. Dunantin complement our leadership team at a critical point for our technology.
Speaker 3: We look forward to his guidance as we advance the clinical and regulatory programs for our portfolio of cardiac devices. Dr. Dondin King will work closely alongside Chief Technology Officer Darren Euker and Chief Strategy Officer Mitch Levinson.
Speaker 3: Mitch is a medical device in district veteran with a track record of successfully bringing new technologies and products to market across a variety of medical specialty.
Speaker 3: He is on the call and will participate in Q&A. Pulse biosciences is on a path to deliver beneficial first and kind therapeutic effects that have yet to be achieved within the current pulse field of lesion market.
Speaker 3: The platform nature of biotechnology enables multiple clinical possibilities.
Speaker 3: We continue to look, listen, and evaluate opportunities outside of cardiac. If and when something important manifests, we will share it with you, our shareholders, on a timely basis.
Speaker 3: I talk focus remains developing a cardiac ablation catheter in surgical ablation clamp utilizing NSPFA for the treatment of atrial fibrillation or AF. There are the clear emerging consensus from treating physicians that PFA is the staver and faster than RF and cryo.
Speaker 3: And we believe that we can take this step further by creating a more advanced treatment that will benefit both patients and clinicians. Preclinical evidence suggests NFPFA can potentially offer a leading safety and efficacy profile in comparison to traditional thermal ablation modalities.
Speaker 3: and even newer PFA technology.
Speaker 3: The ability to penetrate this $8 billion market will lead Pulse towards long-term value creation for patients, providers, and shareholders.
Speaker 3: We are working to develop several devices that will deliver NSPFA to cardiac tissue.
Speaker 3: On our last call, we unveiled two goals that align with our heightened corporate focus.
Speaker 3: One, to develop and advance our cardiac clamp through the appropriate FDA regulatory path, and two, to complete all catheter products and regulatory milestones required to treat initial clinical study patients.
Speaker 3: Achieving these goals should lay in the groundwork for long-term success in the cardiology space and support a viable business model.
Speaker 3: We plan to accomplish these milestones during the first half of 2024. We are proud of our achievements throughout the first quarter. We recently completed the pre-submission meeting with the FDA for our cardiac ablation plan, and they're in the process of finalizing our regulatory pathway.
Speaker 3: We are continuing our pre-clinical studies to support first-in-human trials with our catheter device, and we have three related abstracts accepted at the 44th annual heart rhythm society meeting.
Speaker 3: I will now turn it over to Darren to discuss the technology in the product roadmap. Thank you, Kevin. On our last call, we overviewed our current priorities to advance pre-clinical work with their NSPFA surgical clamp and catheter.
Speaker 4: As a reminder, both of these devices are intended to treat AF but with different approaches.
Speaker 4: The clamp will be used during open or minimally invasive heart surgery by cardiac surgeons.
Speaker 4: The catheter will be navigated into the heart using standard minimally invasive catheter techniques through large blood vessels by electrophysiologists in the EP lab.
Speaker 4: As a quick reminder, nanosecond pulse field oblation, or NSPFA, is a novel platform technology that utilizes nanosecond duration electrical pulses of energy to ablate cells while sparing surrounding a cellular tissue.
Speaker 4: The non-thermal mechanism of action of NSPFA can lead to beneficial differentiated outcomes and applications where a relation is performed today.
Speaker 4: We developed our proprietary cell-effect system as a platform to deliver NSPFA across a number of applications, including cardiac ablation.
Speaker 4: NSPFA differs from standard PFA and that the pulsed durations for NSPFA are much shorter, typically 10 to 10,000 times shorter, which translates to appropriate energy exposure and an energy efficient mechanism.
Speaker 4: In turn, less energy per NSPFA pulse allows us to design larger footprint electrodes that can treat more tissue faster with substantially reduced risk of thermal damage that is of concern with standard PFA.
Speaker 4: Appropriate controlled energy and shorter duration pulses stimulate less muscle contraction and nerve stimulation during treatment and as such reduce the need for stronger sedation and paralytics that are often used with standard PFA.
Speaker 4: Overall, we believe NSPFA will provide meaningful benefits in both efficacy and safety over standard PFA and thermal modalities.
Speaker 4: Turning first to our cardiac ablation clamp, we continue to believe NSPFA can offer a significantly faster, more precise, safer, and easier way to perform a surgical ablation procedure for AF than current technologies.
Speaker 4: We believe our NSPFA clamp will replace radio frequency of the clamp's being used today.
Speaker 4: Because the clamp is similar in physical design, physicians with experience using radio frequency ablation clamps should be able to easily transition to our NSPFA clamp and immediately appreciate all the benefits of NSPFA, including speed of procedure with ablations being up to 10 times faster, as well as increased precision of ablation and overall improvements in ease of use.
Speaker 4: We recently met with the US Food and Drug Administration, or FDA, to discuss the regulatory requirements for a potential FDA clearance as part of the FDA's standard Q submission process.
Speaker 4: This initial discussion with the FDA was productive and further communication will now be ongoing with the near-term goal of finalizing requirements for a 510K clearance for our NSPFA claim.
Speaker 4: The discussion will include agreeing on the requirements for a preclinical study, known as a good laboratory practices, or GLP, preclinical study, in support of a 510K clearance.
Speaker 4: Once this is agreed upon with the FDA, we would expect to be able to quickly execute the GLP study and any other testing required and submit a 510K to FDA during Q1 2020-24. We continue to be encouraged by the preclinical testing we are doing.
Speaker 4: Dr. Dunnington has been involved in our preclinical testing since the beginning of the year as a consulting cardiac surgery key opinion leader, using our clamp and experiencing firsthand speed, precision, and safety of NSPFA when treating cardiac tissue.
Speaker 4: His decision to join our team is both a validation of the potential of this application for NSPFA and a major boost to our team that will help ensure we achieve our goals of delivering a highly differentiated patient and physician-friendly device to cardiac surgeons.
Speaker 4: Turning to our second product in development, the cardiac catheter ablation device, we believe our unique mechanism of action and device design will enable a full circumferential ablation in a single treatment, resulting in better efficacy, safety, and shorter treatment times compared to traditional modalities.
Speaker 4: We believe our current design is well suited for a first in human clinical study following the completion of several ongoing pre-clinical studies. To effectively market and distribute the device in the U.S., we anticipate the catheter will require an FDA pre-market approval or PMA.
Speaker 4: This process will likely take several years and we look forward to sharing updates on our progress along the way.
Speaker 4: The preclinical data we have produced continues to validate the unique design of our NSPFA devices.
Speaker 4: To further increase awareness of our technology, our team will be participating in several key conferences throughout the year.
Speaker 4: The annual Heart Re them Society meeting is one of the premier scientific meetings for AF in the United States and is attended by top physicians from around the world. Having three abstracts on our pre-clinical work is very encouraging and speaks to the excellent work done by our team and physician collaborators. Additionally, in June , Dr. Dunnington will be giving an oral presentation at the International Society for Minimally Invasive Cardiothoracic Surgery Meeting and will be providing information on our NSPFA Clamp to the audience of Minimally Invasive Cardiothoracic Surgeons.
Speaker 4: Now, I'll turn the call to Mike Coffler for an update on our financial results.
Speaker 4: In the first quarter of 2023, we reduced non-GAAP total cost and expenses by 6.3 million to 8.3 million, compared to 14.7 million in the prior year period. The decrease in operating expenses was driven by the virtual discontinuation of commercial dermatology activity and the prior headcount reduction and restructuring. non-GAAP net loss for the quarter ended March 31, 2023 with 8.6 million, compared to 14.2 million for the quarter ended March 31, 2022. Cash, cash equivalents and investments.
Speaker 4: Total 54.1 million as of March 31st, 2023, compared to 61.1 million as of December 31st, 2022. Cash used in the first quarter of 2023, total 7.2 million, and was reduced compared to both 15.9 million, used in the same period in the year, in the prior year, and 8 million used in the fourth quarter of 2022.
Speaker 4: Cash used in the first quarter excludes 200,000 of net proceeds from the exercise of warrants. As a result of the Titan corporate strategic focus, in 2023 we expect quarterly cash for into average approximately $9 million.
Speaker 4: shares at the company's common stock at a price of $6.51 per share, a slight premium over the closing price of the previous business day.
Speaker 4: We successfully closed this private placement transaction earlier this week, which resulted in the issuance of the shares and the cancellation of all indebtedness owed by the company to Mr. Duggan, including the principal balance of 65 million, and the accrued unpaid interest of approximately 0.25 million. This private placement transaction should provide us the runway capital we need to oversee our first interview.
Speaker 4: in 2023 represents an opportunity to raise up to an additional approximately 15 million. Friday, June 16, 2023 at which time any unexercised warrants will be redeemed by the company at a price of 1 cent per warrant.
Speaker 4: As a reminder, the warrants have a $2.05 per share exercise price. The exercise of all the still outstanding warrants would meaningfully extend our cash runway. I will now turn the call back over to Kevin.
Speaker 3: Thank you, Mike. Now I will provide some closing remarks.
Speaker 3: With a now even more accomplished veteran leadership team in place, a strengthened balance sheet in our preclinical and regulatory progress, we are confident we are on the right path forward.
Speaker 3: Our novel NSPFA technology differentiates us from others in the cardiac PFA space.
Speaker 3: We are excited to advance our clamp and catheter devices, and it ultimately advanced the treatment for AF patients.
Speaker 3: We look forward to providing progress updates on the next call. Joining me for the question and answer session today are Executive Chairman of the Board, Robert Duggan, Chief Technology Officer, Darren Uecker, and Chief Strategy Officer, Mitch Levinson. Operator, please open the call for questions.
Speaker 1: We ask that you limit your questions to one so that others may have an opportunity to ask questions. For participants using speaker equipment, maybe necessary to pick up your handset before pressing the star keys. At this time, I will turn the call back to Kevin Daneh, while we are polling for questions. Thank you, operator. Conducting the question and succession, we had a few questions that came in via email. The first question is directed towards Darren, with regards to your cardiac clamp. Is this the only device that you envision for the NSPFA in cardiac surgery? Yeah, thanks, Kevin. So we believe there's a significant and growing opportunity for NSP...
Speaker 4: of a minimally invasive procedure from a cardiothoracic surgeon and a catheter procedure from an electrophysiologist. So we believe strongly that these hybrid procedures represent a significant growth opportunity and they're going to be opportunities for novel devices enabled by NSPFA and our cell effects platform to help expand that opportunity and.
Speaker 4: And this is what also led us to work with Dr. Dunnington and to bring him on as our CMO. He's been involved in over 1,000 hybrid procedures, so he has one of the biggest experiences in these types of hybrid procedures as a cardiothoracic surgeon and has great insights into how these procedures can be evolved with.
Speaker 1: a unique technology like NSPFA. So, you know, we think this evolution will take time, but we're excited about how NSPFA and our team can play a role in this opportunity. Thank you.
Speaker 3: Awesome, thank you, Darren. The next question that came in is directed to Mitch. What other areas can NSPFA have value? And are you looking into these opportunities?
Speaker 4: Yeah, thanks Kevin. Well, as we've talked about over the years, our nanosecond pulsing technology, it's a platform. We will have utility across a large number of medical disciplines. Part of my role here as it's our chief strategy officers to.
Speaker 4: field incoming interest about extra cardiac applications, applications outside the heart, and also to analyze the potential for future opportunities. And as we've mentioned, we've focused now virtually all of our resources on cardiac. When we have important and tangible information about progress in other areas, we'll be sure to report that out.
Speaker 3: Perfect. Thank you, Mitch. Operator, please open up to the next question.
Speaker 1: Ladies and gentlemen, once again, to ask a question, please press star 1.
Speaker 1: Our first question is from Robert Levant, private investor.
Speaker 1: Hi guys. Kevin, can you give us an idea of the market potential for the ablation clams compared to catheter-based procedures? Hey Bob, it's Darren. Great to hear your voice. Thanks for the question. I'll just jump in and then Kevin can come on top. So, you know, right now the catheter ablation market is substantially larger.
Speaker 4: about, like I just mentioned, actually in response to a question, was that more and more cardiothoracic surgeons are teaming up with the electrophysiologists. And so what would traditionally have been thought of as maybe only a catheter-based procedure is now turning into a catheter-based procedure.
Speaker 4: You know, 1 step by the cardiothoracic surgeon and then another step by the electrophysiologist and and so we're probably 1 of the only companies, or maybe the only company that is using PFA on both sides of that. So, we think there's a really unique opportunity to work with both sets of physicians.
Speaker 3: to help solve that problem. Kevin, I don't know if you wanna. Yeah, Robert, thank you for the question. And I think the thing that's exciting for us right now is we believe that we have a platform technology that can provide a programmatic solution to AFib. And what I mean by that is we know, in talking to Dr. Gann-Dunnington, that there's a new wave of treatment that is saying that if you're touching the heart for any reason, you should be exploring and treating for AFib.
Speaker 3: And we don't think that market has been realized yet. And what we believe with our technology is that we will allow them to use NSPFA on the cardiothoracic side, but then work with the electrophysiologist team to map it after the cardiac opportunity, and then work in collaboration in a hybrid procedure as Darren talked about. So we're ex-
Speaker 1: Hope Productions. Thank you. I'm reminded that in this whole discussion this morning or this afternoon of a meeting that I was attended in Herb Kay's living room. I don't know if Bob Duggan was there but he had just conducted it with a person there who had just started the.
Speaker 5: just gone public with a laser company. And basically the gist of the meeting was this laser was a very unusual platform or procedure. And it was, the guy said, just the beginning. I'd like to have Bob Duggan make a comment on that.
Speaker 1: If possible, yeah, yeah, yeah. Hi, Bob. Well, okay was a venture of mine and unbelievable guy. I did not attend that meeting. What I can say is the runway that we've been on with NSPFA.
Speaker 1: tells me that there is a significant market out in front of it. We're using the essential core energy resident in every cell to determine its function. We have an ability here to change polarity.
Speaker 1: of the nucleus of the cell and thereby change function. Fortunately and amazingly, it does it in a natural form consistent with the way the body operates. You wind up with something called apoptosis cellular death, which is a natural cell death as opposed to
Speaker 1: but we're not early days in terms of does is this technology appropriate or is it going to work. We're going to end our way through FDA clearances. These things will basically mostly be open label unlike in the drug business where you don't know until you know they announced who's going to win the Academy Award. It's going to be very clear and plain.
Speaker 1: how well the technology is performing. And to validate that, you know, like Dr. Dunnington has come on board, we have numerous cardiac and other outside cardiac luminaries that are just at our side, really anxious and currently working with us.
Speaker 1: to move this technology into a place where it can perform for them. So yeah, I would without doubt a reservation say that we're on to something and this places that are just going to be exciting.
Speaker 1: So I hope that goes to answer the question. I can't put a dollar on it that that would be inappropriate, but this is, you know, Trent Loop and Tobicazgrove, real mentors of the early on cabbage procedure evolved the Cleveland Clinic back in the day. They always said, you can do something very fit. That's where we're all headed. That's the home run. So.
Speaker 1: This is something for APIP. So yeah, I'm excited. I appreciate you asking a question.
something for APIP. So yeah, I'm excited. I appreciate you asking the question. Thank you.
Yeah, that was it. Our next question is from Kurt Krueger, private investor. Oh, hi. My Bob, Kurt here. Can you hear me alright? Yeah. Yeah, we can hear you. Good. Good. Good. I am very interested in the way your company is pivoted now toward this very promising procedure indication. There are lots of reasons why A-Tib, you know.
Lots of reasons for that. It takes too much time. Fussy.
You know, it doesn't work that well. Do you feel like your patheter your technology addresses some of those impediments that you know the markets had? Yeah, just bought that. 100% were a bullseye there because you know as Isaac Asmock
years to counter a billion. The lightning blistering speed at which we can deliver volumes of energy not otherwise deliverable by other products puts us in a zone of incredible patient safety as we deal with the vital area of the human body. So it's not really that RF and Cairo (/
doesn't work, it's the collateral damage that they do in order to work that places the patient at risk. Our collateral damage, if it's a handful of percentage points relative to what otherwise is available, that's where we come out ahead. That will be demonstrated as we get the first in human. It's been demonstrated pretty clinically. We're pretty pleased about it. We're pretty pleased about it.
you all, but it's this could make a big difference, which is exciting. And you know, you may have said it, I may have missed it, but are you looking to do this is going to require a PMA or 510k? And then when do you think you could see sales maybe like a year from now? year and a half from now? Yeah, well, as we said, it will likely go to
it may be slightly ahead of safety, but it may be a close second. Those two are markers. I don't think it's going to be an untoward path. Our major challenge is to make sure we explain it accurately, such that the FDA personnel are able to view a novel device.
and then we brought in patient-friendly oncology therapy, which was, if anything, an oxymoron and all those work, this should be easier, quite by a long leap, than either of those two. So we don't know. The good news is, as we do it, the results will be available, and market size will adjust accordingly. And I...
And it's tough until you wind up with the trial and get it through the FDA, whether you want or not. This isn't gonna be the case here. It's gonna be very, very clear. And we have the clamp. So the clamp, I don't hesitate to say, well, let me be more cautious. How that gets through the FDA, the FDA will determine and will follow their advice.
But I believe it would be a lot less difficult than the certain parental catheter that we have in mind. So I hope again that addresses, but we are going to be very active over the immediate quarter here and get to the human body, first and human just as soon as possible. And then that'll tell the story. Thank you very much. And I said nice to check in with you again, Bob. Yeah, yeah, you too as well. Thank you.
Ladies and gentlemen, we have reached the end of the question and answer session and are out of time for today's call. Pulse Bioscience thanks you for your participation. You may disconnect your lines at this time.
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