Pulse Biosciences, Inc

Greetings and welcome to Pulse Biosciences' fourth quarter 2020 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 would now like to turn this conference over to your host, Mr. Philip Taylor, Investor Relations. Please go ahead. You may begin.

Thank you, operator. Before we begin, I would like to inform you that comments and responses to your questions during today's fall reflect management's views as of today, February 22nd, 2021 only, and will include forward-looking statements and opinion statements. These statements regarding our plans and expectations relating to regulatory clearance, including the process, timelines, and expected outcomes, our commercial, operational, scientific, clinical, and financial projections, products, including the uses, benefits, and applications of such products, our commercial and regulatory strategies, the impact of the COVID-19 pandemic, and other future events. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are described in detail in our most recent quarterly report on Form 10-Q filed with the Securities and Exchange Commission on November 9, 2020. Our SEC filings can be found on our website or on the SEC's website. Investors are cautioned not to place undue reliance on forward-looking statements. Please note that this conference call will be available for audio replay on our website at PulseBiosciences.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 Darren Uecker.

Thank you all for joining us this afternoon. As an organization, Pulse Biosciences has recently achieved major milestones that significantly advance our mission to offer bioelectric medical solutions that make meaningful differences for the betterment of patients and clinicians. Just weeks ago, Pulse Biosciences received FDA clearance and CE mark approval for the CellFX system. As a result, the company has transitioned from a clinical organization focused on observation and evaluation of a broad range of medicinal therapeutic potential opportunities, as well as regulatory validation across a number of geographies to a commercial organization, driving adoption of our novel CellFX system with CloudConnect services. 2020 was truly a transformational year for Pulse Biosciences and has laid a strong foundation for commercial growth and expansion of our CellFX technology platform. Our CellFX system and its embedded hardware, software, and cloud technology represent a new era of energy-based medicinal therapy platforms. On the call today, we are excited to provide a detailed update on our fourth quarter and more recent accomplishments. I will start by describing how the CellFX system regulatory approvals shape our corporate focus and priorities in 2021. Ed will outline the start and direction of our controlled launch program, including continued scientific community engagement. And then Sandy will detail the financial results before I provide color on significant therapeutic opportunities beyond dermatology and open the call for Q&A. In 2020, we set three main business objectives and were successful on all three fronts. The first objective was to achieve regulatory clearance for our CellFX system in the U.S., the European Union, and Canada. The second objective was to prepare for the commercial launch of the CellFX system with Cloud Connect Services. And our third objective was to further explore, evaluate, and prioritize meaningful therapeutic opportunities outside of dermatology. Our success with these three objectives drives our priorities for 2021. This year of major importance and top priority is the execution of our unique controlled launch program for the CellFX system with CloudConnect services in the US and EU and eventually in Canada. Our second objective is to continue to progress our stepwise regulatory strategy with FDA in the U.S., expanding the cell effect system's indications for use to specific lesions, including sebaceous hyperplasia, or SH, cutaneous non-genital warts, and other benign lesions. We will maintain our presence in the scientific community. where we are building our rapidly growing library of clinical evidence on the efficacy, safety, patient care, and provider value of the CellFX platform. And additionally, we will continue to advance therapeutic opportunities outside of dermatology. Before I cover our new objectives in more detail, I would like to explain our technology for anyone new joining us today. The first commercial product at Pulse Biosciences is a multi-application platform called the CellFX system. that delivers our proprietary nanopulse stimulation, or NPS, technology to the skin initially for use in dermatologic procedures. NPS is a nanosecond pulsed energy-based modality offering unique benefits. NPS is a non-thermal modality that affects only cellular structures while leaving non-cellular structures unharmed. Compared to thermal modalities, the cell-specific nature of NPS can lead to enhanced aesthetic outcomes in general dermatologic procedures as non-cellular collagen is unaffected, while the problematic cellular tissue is completely eliminated. We believe our technology represents a significant step forward as a procedure for aesthetic dermatologists and could provide the ability to treat conditions that were not addressed previously because the collateral damage using prior modalities could be worse than the original condition. The CellFX system is a software-enabled, tunable, cloud-engaged console that powers a handheld treatment applicator. The highly customizable configurations of applicators and energy settings enable a wide range of procedural settings to address multiple dermatologic conditions. It is designed to accommodate the clinical workflow preferred by dermatologists, with patient procedure times as quick as 15 minutes. Based on our extensive industry experience and a collaborative process with clinicians, we designed a proprietary integrated cloud software infrastructure that links our CellFX systems to our internal resources, which we call CellFX Cloud Connect. It is the backbone of our innovative utilization-based business model that aligns the interest of patients, practices, and the company. CellFX Cloud Connect is the cloud application that provides a novel suite of tools that integrates the customer, the system, our e-commerce customer portal, and practice management tools to track utilization data and other metrics, while on the back end connecting to our internal customer relationship management system, and enterprise resource planning system. The CellFX marketplace, a part of the CellFX Cloud Connect services, is our customer portal where medical practices purchase and wirelessly download cycle units directly to the CellFX system. Cycle units are purchased and then consumed on a per lesion basis. So the more lesions the patient wants cleared, the more cycle units are required. This enables a preferred economic model as physicians have fixed cost per lesion and can charge the patient on a per lesion basis, which is aligned with the patient's preference. Our model contrasts with the currently employed disposable and single-use based medical device models, removing many of the economic barriers created with disposable use models and reducing the purchasing and inventory burden on the clinic that can occur in those models. The CellFX Marketplace also provides a dashboard of utilization metrics for the clinic to monitor the productivity and profitability of the CellFX system on a daily basis. This novel capability, enabled by the CellFX Cloud Connect infrastructure, is a key feature that we believe will drive adoption of the CellFX system by providing key insights to the physicians in establishing and growing a successful CellFX franchise. One last note about CellFX Cloud Connect. is that it facilitates direct connectivity for Pulse Biosciences to remotely perform software upgrades to the CellFX system, as well as provide any service functions in real time. Because of this ability to streamline, be responsive, and reduce disruption to the clinical workflow, CellFX Cloud Connect allows us to provide next-level support and enable seamless commercial growth for our customers. We believe this advanced delivery model not only enhances the delivery of NPS technology, but will create a premier experience and growth potential for our valued physician customers and their patients. Our obligation and commitment is to make it as seamless as possible to integrate the CellFX system and CloudConnect experience into thousands of practices. That brings us to our first two objectives for the year, regulatory clearance and our controlled launch program. Following FDA clearance and CE mark approval, we are now permitted to market CellFX systems in the U.S. and the European Union. The controlled launch program was successfully initiated within days of our respective approvals. We have now shipped cell effect systems to U.S. and European physicians, and they have been trained and are performing procedures on their patients. Executing a commercial launch of new medical technology this quickly after regulatory clearance is a significant accomplishment in a single geography. To do so in two major geographies simultaneously requires an experienced, focused, and well-prepared team. and I would like to congratulate our organization for making this happen. We have an experienced and talented team in place, including sales, marketing, customer service, and operations professionals who are facilitating this launch. We plan to grow this team as our commercial efforts ramp. More important than how quickly we launched, though, is the thoughtful, measured approach we have designed to ensure key opinion leaders, the most influential physicians in the space, and their patients share an exceptional experience with the CellFX system, and that best practices related to this experience are observed, fully understood, and shared across our clinical partner base. The level of excitement and commitment to our technology from Control Lounge participants has been extremely encouraging. We are invested in helping these KOLs create model CellFX franchises in their practices. In turn, the KOLs have demonstrated their commitment through participation in extensive virtual and practical training It represents a reciprocated commitment to their CellFX system. Physicians and their staff are excited not only to learn about how to perform the procedure, but also how to educate their patients about the differentiated benefits of our CellFX platform. We are very pleased with where we stand less than a month into commercialization. We will use the remainder of 2021 to phase in our KOL participants in the U.S. and Europe. Based on the success of our 2020 awareness, scientific, and educational programs, and our immediate ability to service demand post-regulatory clearances, we have decided to embrace 75 clinics in our controlled launch program across the U.S. and EU. Later in the call, Ed will provide additional details on our approach and early experience. With regard to our Q4 2020 submission to Health Canada for approval of the CellFX systems, We recently received a number of questions in the form of an additional information letter and expect to respond to the questions in the next couple of weeks. According to Health Canada guidelines, once we submit our responses, Health Canada may take up to 45 days to complete the review. Based on this timeline, we expect the review to be completed in early Q2 2021. And if the review results in a Canadian medical device license for the Cellifex system, we will begin our controlled launch program in Canada immediately. Our second objective for 2021 is to drive progress on our stepwise regulatory strategy with FDA. Now that we have received the intended general indication label, the one we were pursuing, we are able to make subsequent submissions for indications for the treatment of specific lesions. These potential additional clearances will enable us to assist physicians in more targeted marketing of the procedures to their patients. As we have shared, we will initially pursue specific indication clearances for sedacious hyperplasia, followed by non-genital warts. We view these as large and unaddressed market opportunities that our customers are not able to treat to their satisfaction with existing technologies. We announced in January that the treatments in the pivotal comparison study to evaluate the treatment of SH are complete. We are finalizing this 510 submission, and it is on track to be submitted to the FDA as early as the end of the first quarter. In parallel, we have been working on designing and executing our trial for non-genital warts. The IDE was approved for a pivotal comparison study to evaluate the treatment of cutaneous non-genital warts, and we recently treated the first patients in this study. We expect enrollment to be completed in Q2 2021 and submission of the data in our 510K to FDA to take place in Q4 2021. The cadence we have established with our clinical and regulatory work is intended to drive regular cell effect system application expansion over the coming years. Now I will turn the call over to Ed to share more on her plans and progress for the controlled launch of the cell effect system in the United States and Europe. Thank you, Darren.