Q3 2024 Pulse Biosciences Inc Earnings Call
Speaker Change: Greetings and welcome to the Poles by O'Science third quarter 2024 financial results conference call.
Speaker Change: At this time, all participants are an all-in-all-only mode.
Speaker Change: A brief question and answer session will follow the formal presentation. If anyone should require operators to explore in the conference of Seas Press star zero on your telephone keypad, as a reminder, this conference is being recorded.
Speaker Change: It is now my pleasure to introduce your host, Trip Taylor, Investor Relations. Thank you sir, you may begin.
Trip Taylor: Thank you, operator. Before we begin, I would like to inform you the comments and responses to your questions during today's call reflect management views as of today. October 30, 2024, only, and will include forward-looking statements and opinion statements, including predictions, estimates, plans, expectations, and other similar information.
Trip Taylor: Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties.
Trip Taylor: These risks and uncertainties are more fully described in our press release issued earlier today and in our findings with the U.S. Securities and Exchange Commission.
Trip Taylor: R.S.E.C. filings can be found on our website or on the F.E.C. website. Investors are caution not to place undue reliance on Ford-looking statements.
Trip Taylor: We disclaim any obligation to update or revise these forward-looking statements. We will also discuss certain non-gap financial measures. Disclosures regarding these non-gap financial measures, including reconfiliations with the most comparable Gap measures, can be found in the press release.
Speaker Change: Please note that this conference call will be available for audio replay on our website at pulsebiosciences.com in 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 Burke T. Barrett.
Speaker Change: Good afternoon. Thank you all for joining us.
Speaker Change: Today, we'll start by providing updates on our business progress and then Mike Koffler, Vice President of Finance, will review the third quarter 2024 financial results.
Speaker Change: and we'll be joined by Bob Duggen, co-chair of the board.
Speaker Change: Darren Euker, Chief Technology Officer and Director, and Kenneth Kevin Danahy, Chief Commercial Officer, for a question and answer session.
By way of background, pulse biocent is a novel, medical company committed to health innovation using its patented nanopulse simulation technology or nanopia-fa.
Speaker Change: A revolutionary energy modality that delivers nanoseconderation pulses of electrical energy.
Speaker Change: each less than a millionth of a second long to non-thermalede destroy targeted cells while sparing adjacent non-cellular structures in material.
Nano PFA technology when used to a blade cellular tissue has the potential to treat a variety of medical conditions for which an optimal solution remains unfulfilled.
Speaker Change: The company developed its proprietary cell SX system, a novel, manual PFA delivery platform, and commercialized the initial application to treat benign lesions of the skin.
In parallel, the company is designed and developed a variety of disposable.
Speaker Change: Sometimes called end-effectors.
to explore the potential youth of the platform to treat disorders and other medical specialties.
Such as cardiology, gastroenterology, gynecology, and earsmosen throat.
Speaker Change: These indications include devices for open surgical procedures, end of the scoffic or mentally invasive procedures and end aluminum catheters.
and each has been used in pre-clinical studies.
Speaker Change: based on our pre-clinical experience.
and the potential to significantly improve outcomes for patients in large and growing markets.
Speaker Change: The company decided in 2022 to focus its primary efforts on the use of nanopf-a energy in the treatment of Hrial Fibrelation or AS.
Speaker Change: as well as in a select few other markets such as solctitual ablation. Where it could have a profound positive impact on healthcare, for both patients and providers.
Speaker Change: Our technology is different from the most commonly used micro-second PFA, and that the pulse with is much shorter.
Speaker Change: This shorter pulse width, which is in the range of a millionth to a billionth of a second, and so up to a thousand times shorter than Michael PFA.
has the benefits of both allowing for unique product designs and the potential for a different and better method of ablation at the cellular level.
The goal of which is to remove or destroy unwanted cells.
Speaker Change: The third quarter was extremely productive for Paul Spiosciences.
and here are a few highlights of our progress since the start of two three.
Retreated the first patient with AF using our Nano PSA cardiac surgery system in Europe.
Speaker Change: The cardiac surgery system also received U.S. FDA breakthrough device designation for the treatment of AF and was enrolled in FDA's tap program, which is short for total product lifecycle advisory program.
Tap provides even more accelerated pathways than breakthrough.
Speaker Change: We also completed our rights offering raising 60 million gross proceeds with the potential to raise an additional 66 million through the exercise of warrants.
Speaker Change: Each warrant is exercisable for $11 per share, and she equals 110% of the subscription price for the units.
Speaker Change: Warrants are exerciseable immediately.
Half of the warrants are redeemable by the company as the company stock exceeds.
16,50 cents for 20 consecutive trading days.
and the other half of the warrants are redeemable by the company if its stock exceeds $22 for 20 consecutive trading days.
Holders of the warrants have the right to exercise them at any time until they are redeemed or expire.
Each of these accomplishments represents significant progress with our business that will support our mission to deliver nanopiephatechnology to patients and providers around the world.
Our early clinical work with the three different clinical indications or applications of nanopfA confirms our strong belief that the technology has the potential to advance the standard of care for the treatment of multiple disease states across the human body.
Speaker Change: The differentiated mechanism of action has demonstrated the unique potential to destroy cells in a better way than heat, cold, radiation and even currently available micro-PFA.
Our products are protected with intellectual property and know-how which we believe will assist in maintaining our competitive advantage.
The Paul's team continued to make great strides, advancing this technology in Q3.
Speaker Change: with our Ablation Applications across Software Tissue, Cardiac Surgery for AF, and Endicardio Cather Ablation for AF. We are currently focused on developing the path to commercialization for each of these three applications or indications.
at a high level. Our strategy is centered on producing compelling clinical data to demonstrate the safety and effectiveness profile for each application.
attended with unique and differentiated single-use disposable devices.
Speaker Change: The clinical endeavors are occurring now and progressing well across each of the three applications and will ultimately involve hundreds of patients.
Robust clinical data will enhance our understanding of nanopfab base treatments.
Speaker Change: as well as enable us to clearly articulate these benefits to the market and subsequently raise awareness for nanopf-a technology.
Compiling clinical data can differentiate our products and lead to competitive advantages from a marketing perspective and also lead to stronger value propositions as evaluated by payers for reimbursement.
and the U.S. regulatory perspective.
Speaker Change: We plan to seek specific indications for the use of our devices.
Speaker Change: These types of labels occur over time and follow a precise regulatory process, but hold the potential significant benefit of promoting marketing, selling and training users for a specific treatment indication.
Speaker Change: We expect specific indications will help drive faster clinician adoption and market penetration once approved.
Speaker Change: Now I will provide updates on each of our individual products.
Speaker Change: Starting with our soft tissue-ablation application, today I will dive deeper into this significant and promising opportunity to provide unique solutions for patients and need of better treatments.
Earlier this year, our cell-fax Percutaneous Electro-System received FDA-510K clearance for youth in the
Physicians, Utilite, Software, Ablation, and Abroad, Area Procedures.
such as those involving the thyroid liver of breast as well as many other parts of the body. Under the current so-called tool-claim clearance we obtain from the FDA, we can launch our soft tissue ablation system in the U.S. for the use of the number of soft tissues.
So far, the clinicians testing our soft tissue relation device are using it to treat patients with uncomfortable and debilitating benign nodules of the thyroid.
Speaker Change: The thyroid is a small butterfly shaped gland located at the front of the neck. It's an important part of the endocrine system, and controls many of the body's functions by producing and releasing hormones.
The FireWaste main job is to control the speed of metabolism.
Speaker Change: When the thyroid isn't working properly, it can impact the entire body. A benign thyroid nodule is a non-cancerous tumor within the thyroid gland that can be visualized distinctly from the surrounding thyroid, typically using ultrasound.
Speaker Change: Up to 60% of adults may develop at least one benign thyroid nodule over their lifetime. So what happens with great frequency?
Speaker Change: With about 150000 of these performed in the U S and the vast majority about 70% to 80% are for benign disease.
Thyroidectomy reliably eliminates the nodules. However removal of this critical Oregon comes with significant risks and the morbidities associated with any surgical procedure.
Speaker Change: Importantly for patients and the health care system.
Speaker Change: Removal of the thyroid may require chronic treatment with hormone replacement therapy.
Speaker Change: While there are some thermal based needle ablation devices like RF and microwave available on the market they.
They do not have specific indications for this patient population in the U S and have not gained widespread adoption.
From speaking with clinicians. We believe this is mainly because of the risk of thermal damage to critical structures like a nerve called the recurrent laryngeal nerve in the esophagus from the inability to control thermal spread from these heat based ablation devices. This inability to pursue.
Basically control thermal spread creates the risk of damage to these important nearby structures.
The recurrent laryngeal nerves supply sensation to layer mix below the vocal cords.
And damage to this nerve can cause vocal cord paralysis and result in voice changes more horn hoarseness.
Speaker Change: The potential for thermal spread associated with these thermal ablation devices makes use of these devices are high skilled procedure and potentially risky. We believe the treatment of benign thyroid nodules represents a potential market in excess of $1 billion per year to pulse.
As our entry point into this market to date, we have placed our system with seven sites in the U S. As part of a pilot program under no cost evaluation agreements as part of the program. The clinicians are refining their procedural techniques and optimizing that therapy delivery for this novel Nano PSA press.
Speaker Change: Seizure.
The initial clinical experiences with our nano P. S. A needle ablation device and benign thyroid nodules continues to be positive.
Placing the needle electrodes into the benign thyroid nodule and delivering multiple relatively fast deliveries of nano PSA energy covering the majority of the benign thyroid nodule patients typically experience symptomatic relief from a reduction of the size of the nodule during the first month.
And continuing in subsequent months the procedure does not require surgical removal of thyroid and there is no permanent scarring of the neck.
So we see the Kazmi sees the procedure is another potentially very positive factor.
Speaker Change: We expect to extend the pilot program into 2025.
We also expect to support select sites to conduct their own clinical research protocols using our device on benign thyroid nodules.
We plan to work with these pioneering clinicians to develop a pivotal clinical study that.
Speaker Change: We intend to use for submission to the FDA and other regulatory bodies for a specific indication for the use of our nano PSA device in the treatment of benign thyroid nodules.
Tend to initiate a pivotal clinical study in mid 2025.
In summary, this market opportunity for the percutaneous electrodes system is very compelling and well suited to the unique non thermal properties of nano P. S. A the choice patients face today is primarily to continue to live with and often uncomfortable debilitating invisible benign thigh.
Speaker Change: Alright nodule.
Or have a surgical resection of the Oregon, there is a need for a patient and physician friendly meaningful minimally invasive Oregon sparing non thermal ablation alternative.
We're excited to work with leading clinicians who specialize in this area and pioneer and novel treatment modality for patients. We also expect that during the coming quarters. The majority of these clinical users will convert from conducting clinical assessments to using our nano P. F. A percutaneous needle device on a commercial basis.
Looking further out into the future.
We intend to explore other clinical indications for the use of our novel needle ablation device in.
Speaker Change: Soft tissues beyond the thyroid.
That leads us to our surgical ablation application here our first in human feasibility study is underway in the Netherlands during the past quarter. We opened a second study site in the Netherlands, We've now treated nine patients at two clinical study sites.
Speaker Change: We are encouraged by the acute performance our cardiac surgical ablation devices demonstrated the procedures were completed efficiently as a reminder, this multicenter feasibility study is designed to enroll up to 30 patients.
We believe we will be in a position to share preliminary results of this study at a major medical Congress late in 2025.
In the U S. The unique differentiation of nano PSA was validated by the F D. A and its award a breakthrough device designation for the cardiac surgical ablation device.
Speaker Change: We're pleased to report we have now successfully treated over 50 patients the.
Speaker Change: The catheters usability.
Ability to acutely isolate the pulmonary veins and quick case times continued to show the great promise of the device.
Speaker Change: The electrophysiologist using our 360 catheter in Prague are highly impressed with its performance.
And I will add that having spent two decades working in AF ablation, including the development of a unique AF ablation device in my past My view of the 360 Catherine performance after observing several cases firsthand.
So that its ability to acutely isolate pulmonary veins efficiently and quickly is unparalleled.
Its potential is truly that of a third generation PFA ablation device for a F.
We understand that to fully establish the clinical performance of the device, including demonstrating chronic efficacy will require clinical studies with more users more patients treated in the conduct of a high quality pivotal clinical study.
We're also pleased to be engaged with two additional EU clinical study sites that are scheduled to perform procedures by year end <unk>.
Speaker Change: Additional users insights will provide valuable information on the device its learning curve ease of use and performance in different workflows during AF ablation procedures.
Leveraging the current understanding of the $3 60 catheters clinical performance, we are designing a pivotal clinical study.
Speaker Change: We continue to expect to begin the U S. I D E pivotal clinical study in the middle of next year.
Speaker Change: Successful pivotal clinical study results will support an FDA PMA submission for the 360 catheter.
To further support our AF ablation product strategy. We are pleased to have recently announced Dr. David Konigsberg has joined US as Chief Medical Officer for Electrophysiology Dave.
David is an accomplished or electrophysiologist with a thriving private practice.
I have known David for many years.
$1 7 million compared to $10 6 million in the prior year period.
non-GAAP net loss in the third quarter of 2024 was $9 4 million compared to $8 5 million in the prior year period.
Speaker Change: In the third quarter, we strengthened our balance sheet considerably through the completion of the rights offering in July raising $60 million in gross proceeds with the potential to raise an additional $66 million through the exercise of the associated warrants.
As of September 30th 2024, cash and cash equivalents totaled 79 million compared to $44 4 million as of December 31, 2023.
Speaker Change: Cash used in the third quarter of 2024, excluding financing activity totaled $8 5 million compared to $8 7 million used in the same period in the prior year and $8 7 million used in the second quarter of 2024.
I'll now turn the call back over to Burke.
Thank you Mike as we look forward. We are excited to continue our initial clinical experiences with their three products throughout the remainder of 2024 and into 2025.
Focus at pulse right now is to continue to treat patients in each of our three active indications advance our clinical understanding of the performance of each device and move forward in the regulatory processes towards approved devices that may be commercialized to support our anticipated growth we are building our team.
Speaker Change: And the infrastructure required to conduct three pivotal clinical studies with these three products beginning in 2025.
Speaker Change: We strengthened our team with the addition of a new co chair of the board.
Speaker Change: Weis President of marketing, our vice President of clinical engineering, and a chief Medical officer of Electrophysiology now joining us for the question and answer session. Today are Bob Duggan co chairman of the board during Euchre, Chief Technology Officer, and director and Kevin Danahy, Chief Commercial officer.
Operator, please open the call for questions.
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