CeriBell, Inc.

Thank you for standing by. My name is Cath and I will be your conference operator today. At this time, I would like to welcome everyone to the cerebral third quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. I would now like to turn the call over to Brian Johnston from Gil Martin Group. Please go ahead.

Good afternoon, and thank you all for participating in today's call. Joining me from Cerebell are Jane Chow, co-founder and chief executive officer, and Scott Blumberg, chief financial officer. Earlier today, Cerebell issued a press release announcing financial results for the quarter ended September 30th, 2024. A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, and that these are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions Future events, results, or performance are forward-looking statements. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our public filings with the Securities and Exchange Commission. including the final perspectives filed with the SEC pursuant to Rule 424B4 on October 11, 2024, in connection with our initial public offering. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, November 12, 2024. Sarah Bell just claims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. And with that, I will now turn the call over to Jane.

Thank you, Brian. Good afternoon and thank you all for joining us today on our first earnings call as a public company. We are very excited to be here and to provide details on our strong third quarter performance. We will also briefly review our growth strategy and cover our key focus areas for the quarters and years ahead. Before doing so, I'd first like to take this opportunity to thank all our shareholders who have supported Cerebel since its inception. In particular, I'd like to thank those who participated in our recently completed initial public offering, which raised approximately $188 million in net proceeds. I would also like to thank the entire Cerebel team, our board of directors, and most of all, our customers who are saving lives every day. With your support and dedication, the future with Arabelle and the patients we serve has never been brighter. Turning now to a brief overview of our results, I'm pleased to report that the revenue for the third quarter of 2024 was $17.2 million. This represents 48% growth year over year. Meanwhile, growth margin for the third quarter was 87%. As we will detail later, our performance was driven by continued progress in acquiring new customers and improving adoption by our established account base. For the rest of this call, I will first provide a brief introduction to Cerebell technology, the unmet need we're addressing. I'll then provide further details on our commercial performance and the vision for the future. Scott will provide additional details in our quarterly financial results and our full year 2024 revenue guidance. At the highest level, we are focused on commercialization of the Cerebral System, our novel point-of-care EEG platform. specifically designed to address the unmet needs in the patient in the acute care setting. Our platform solution, which includes our highly portable, easy-to-use hardware and the AI-powered algorithm, enables rapid diagnosis and continuous monitoring of patients at risk of serious neurological conditions. The Cerebral System is commercially available in the United States. where our initial focus is on seizure detection and management in the ICU and ED. We believe this represents over $2 billion addressable market opportunity in the US alone. In acute care settings, status epilepticus for a seizure lasting longer than five minutes are a medical emergency. If not promptly treated, the condition can lead to mortality, or severe and permanent brain injury. Seizures leading to status epilepticus can be triggered by a variety of common conditions, including brain tumor, traumatic brain injury, stroke, cardiac arrest, and sepsis, among others. We believe that there are roughly 3 million patients in the U.S. who arrive in the acute care setting and are at risk for seizures. In the ICU, up to 92% of these seizures may be non-combulsive. Patients do not show visible symptoms, making diagnosis very challenging. EEG is the only tool to definitively confirm a seizure diagnosis. Historically, the only tool that clinicians have had to diagnose seizure has been the conventional EEG, which was optimized for outpatient clinics. not for the acute care setting. Conventional EEG systems have several inherent limitations, making timely diagnosis and continuous monitoring difficult and, in some cases, impossible. The Cerebral System changes this, enabling rapid EEG deployment and continuous monitoring for seizure activity. After less than an hour of training, nurses and non-specialized healthcare professionals can easily set up the Cerebral System in as little as five minutes. The Cerebral System can capture EEG waveforms with the signal quality clinically equivalent to conventional EEG and transmit the EEG signals to our EEG portal for neurologists to remotely review. Clarity, our AI algorithm, continuously monitors the EEG, providing best-size alerts for status epilepticus, seizure trends, and other actionable insights to bedside and neurologists. Through clarity, clinicians can have higher confidence in treat promptly or not treat. With continuous monitoring, they can reduce the time patients spend in seizures. They also benefit from real-time feedback on patient response to medication. Importantly, we believe the Cerebral System can also improve the hospital and payer economics by enabling multiple pathways for appropriate reimbursement and cost saving. We have demonstrated across several studies that Cerebral System can decrease the average hospital length of stay, reduce over administration of anti-seizure medication, and reduce unnecessary patient transfer. In addition, confirmed diagnosis of seizure may allow hospitals to receive appropriate reimbursement coding for more complex and costly management of patients with multiple comorbidities. And finally, Cerebral is the only EEG system that qualifies for a new technology add-on payment from CMS, which provides hospital additional Medicare reimbursement of up to $913.90 for eligible patients. These clinical and economic benefits, as well as the technical performance of Cerebral System, have been validated across 20 peer-reviewed publications and 65 abstracts. Now I shift to an overview of our commercial approach and how it has translated to strong third quarter performance. For perspective, We estimated that there are 5,800 acute care facilities in the U.S. that stand to benefit from our offering. To fully penetrate the significant market, our commercial organization comprises two core components. Our territory managers drive account acquisition and onboarding, and our clinical account managers drive utilization and hospital onboarding. Through joint efforts of these sales functions, Derrida has been able to continually expand its active account space while generally increasing utilization within our existing account space. Our active account space now sits at 504 accounts, an increase of 25 during the third quarter. Within this account space, we have continually increased the usage over the past three years, roughly doubling usage per account during this timeframe. Just yesterday, we were also pleased to announce our receipt of an authority to operate, or ATO, from the Department of Veterans Affairs. This ATO represents a significant milestone in achieving authorization within the framework of the federal government cloud computing security requirements. Practically, it allows the nearly 200 VA hospitals in the U.S. to fully deploy Cerebel's point-of-care EEG technology, including Clarity and our other cloud-based services. We're humbled to be one of the very few medical device companies to receive an ATO. from the VA and believe this will enable us to offer many advantages of the clarity and the cerebral system to the veterans who are at an elevated risk level of being diagnosed with a seizure disorder due to the conditions such as traumatic brain injury and post-traumatic stress disorders. Looking ahead, we are continuing to invest in expansion of both sides of our commercial organizations as we look to capture the significant and tapped opportunities within our market. Beyond investing in our commercial organization, we also intend to drive further awareness regarding the importance of acute care EEG monitoring and the unique features and capabilities of our platform solution. To accomplish this, we are directly engaging with clinicians, investing in marketing initiatives, and importantly, generating further clinical and economic data. This data stands to further validate the benefits provided by the DERIVA system and early detection and treatment of status epilepticus generally. In July, we were pleased to see the results from a new retrospective sub-analysis of a multicenter clinical study demonstrating positive patient outcomes following using the Cerebral System compared to the conventional EEG published in the Neurocritical Care, the Journal of the Neurocritical Care Society. The study showed that use of Cerebral System is associated with a significant four-day reduction in ICU length of stay on average. It also showed that patients using Cerebral EEG were 33% less likely to leave the hospital with significant functional disability. These findings, along with four other abstracts, were represented at the 2024 Neurocritical Care Society Annual Meeting in October. We see these positive data as representative of our commitment to being at the forefront of clinical innovation and data generation in our space. As we look ahead, we also see several clear use cases for our platform beyond our current indication. In the near term, we are seeking to expand the age coverage of patients eligible for our clarity algorithm. Currently, our hardware is approved for all ages, but clarity feature detection algorithm is only approved for patients 18 and up. Over the medium term, we expect to move beyond seizure detection. Brain function often remains a black box, even in the best ICUs. Though EEG has historically been limited to the identification of seizures, EEGs have been scientifically demonstrated to aid in detection of a wide variety of other neurological conditions. We intend to leverage our preparatory platform and our AI capabilities to develop algorithms for some of these conditions, including delirium and stroke. I look forward to providing additional updates on these exciting opportunities on our future calls. To summarize, we see substantial growth runway within our immediate addressable $2 billion annual revenue opportunity market. We also see significant additional revenue opportunities with future indication expansion. We look forward to providing updates on our progress with these initiatives over the quarters and years ahead. Meanwhile, we intend to maintain a high degree of focus on our mission to become the standard of care for the detection and management of seizure in acute care setting. To summarize, over the coming quarters, we intend to Invest in our commercial organization to drive adoption of Cerebral System by both new and existing accounts. Continue to drive awareness of seizures in the tube care settings by maintaining a leading presence in generating clinical and economic evidence. And finally, to further scale our business to meet the growing demand for our novel EEG platform. With that, I will now turn the call over to Scott Blumberg, our CFO, to provide a review of our third quarter results.