Pulse Biosciences, Inc

Greetings and welcome to Pulse Bioscience's second quarter 2022 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 the conference over to your host, Phillip Keller, Investor Relations. Please go ahead, sir.

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 10, 2022 only, and will include forward-looking statements and opinion statements, including predictions, estimates, plans, 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. Our SEC filings can be found on our website or the SEC's website. Investors are cautioned not to place undue reliance on forward-looking statements. We disclaim any obligation to update or revise these forward-looking statements. We will 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 PulseBiosciences.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 Darren Euchre.

Thank you, Tripp. Good afternoon, everyone, and thank you all for joining us. On today's call, I will provide an overview of our progress during the second quarter, including our commercial strategy and updates on our regulatory initiatives. I will then pass the call over to our Chief Commercial Officer, Kevin Danahy, to discuss recent commercial activity in the field before Sandy provides a detailed financial update and we open the call to questions. During the second quarter, we continued executing across our refreshed strategic priorities. To support market adoption of the CellFX system within dermatology, our commercial team is now fully focused on our utilization program. Our financial results for the second quarter reflect the initial impacts of our plan to reduce overall operating expenses. Looking at the balance of the year, we will remain dedicated to advancing our objectives to successfully understand and implement CellFX system integration in clinics through the program while expanding system indications for use. As it relates to our initial controlled commercial launch, we transitioned four program participants to commercial use during the quarter. This brings us to a total of 43 commercial conversions with 12 clinics remaining in the program. We also completed two commercial sales in Q2, increasing the install base of commercial cell effect systems to 48. As we mentioned on our last call, we have reduced the emphasis on driving capital sales at new clinics while we focus on the utilization programs. The two system sales were the result of inbound leads that were vetted as ideal clinics for long-term cell effect system utilization. Kevin will provide a more in-depth update on our utilization program progress shortly, but I'd like to first describe some of the observations that have informed the strategy developments. Several quarters into our controlled commercial launch, we experienced inconsistent system utilization after clinics completed their controlled launch requirements. Given the importance of utilization to our business model, we immediately prioritized addressing this challenge. As a result, in May, we initiated our utilization program to fully understand cell effect system clinic and patient workflow integration requirements within a subset of clinics. This program allows us to look closely at the current friction points and determine actions to help clinics overcome any challenges they are experiencing in any aspect of cell effect system utilization from the clinic or patient's perspective. With just over two full months of activity, we are beginning to analyze data collected from collaborating with each participating clinic to determine priority areas to focus our efforts. Our goal is to standardize these practices per clinic type so we can proactively share this information across our current and future user base. We feel like we are on the right track. Our clinic partners continue to believe in NPS and the CellFX system's unique ability to clear benign lesions. The feedback continues to be positive regarding the system's ease of use and capabilities for treating lesions with the CellFX family of treatment tips, and our clinic partners continue to provide input on new applications they are interested in pursuing with the technology. Our focus is on continuing to learn from the clinics and to provide the necessary training, education, and marketing programs to make the integration of CellFX systems as seamless as possible and to enable high utilization within the clinics. We also believe we are gaining a better understanding of the optimal profile for a cell effects clinic given the current indications and requirements of integrating a new technology like this into an already busy practice. Before I turn it over to Kevin for a further discussion on the commercial side, I'll provide an update on our clinical and regulatory pipeline. We continue to advance our stepwise regulatory approach with the FDA to expand the cell effects system's indications for use with specific lesions. This would allow us to support clinics with marketing and promoting cell effects for the treatment of any cleared specific lesions. Starting with an update on our sebaceous hyperplasia specific indication 510K submission. As a reminder, we submitted the 510K to the FDA in the fourth quarter of 2021. Following the submission, we received an additional information request letter, or AI letter, from the FDA. Since our last update call in May, we held a follow-up meeting with FDA in June As a result of that meeting, FDA requested additional information, which was provided in early July. We are now awaiting the FDA's response. We anticipate submitting a formal response to the AI letter once we complete these cycles of communication with FDA. We believe this ongoing communication and collaboration with FDA has been productive. This is the first set of clinical data we have submitted to FDA for an expanded indication following our general benign clearance. We believe the ongoing discussion will help pave the way for more efficient reviews for future indication submissions. We expect to submit a 510 for non-genital warts soon after resolution of the sebaceous hyperplasia submission. With regard to our basal cell carcinoma, or BCC program, we are pleased to report that the data from our treat and resect feasibility study have been accepted for presentation at the upcoming American Society for Dermatologic Surgery, or ASDS, 2022 annual meeting. be held October 6th through the 10th in Denver, Colorado. We look forward to reporting the data in conjunction with the presentation. In parallel, we are planning to meet with FDA to discuss the regulatory path for potential BCC indication in the coming months. In other efforts dedicated to advancing our technology and increasing the capabilities of the CellFX system, we recently received FDA 510K clearance for the use of expanded energy settings for clearing lesions with our CellFX systems. This enables the system to deliver higher energies to address various lesion types. While we view this as an incremental positive step that may expand utilization, we do not believe it has been a limiting factor of utilization in clinics to date. We are pleased to receive this clearance in a timely manner, with the FDA clearing these energy levels in only 53 days of the allotted 90-day review period. We plan to pursue constant improvements to the CellFX system through continual 510K submissions and clearances intended to increase system capabilities and enhance ease of use. These incremental improvements may include treatment settings, new or improved treatment tips, as well as software upgrades, and are in addition to and in parallel with the efforts to expand indications. We view these improvements as a natural and important evolution of the cell effect system, especially in the early years of commercial use, and do not plan to announce every submission. Now, I'd like to pass it over to Kevin.