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spk03: Greetings and welcome to the Pulse Biosciences first quarter 2024 financial results conference call. At this time, all participants are in a listen-only mode. A brief 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. It is now my pleasure to introduce your host, Tripp Taylor. Please go ahead.
spk04: 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, May 7, 2024 only, and will include forward-looking statements and opinion statements, including predictions, estimates, plans, expectations, and other similar 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 US Securities and Exchange Commission. 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. 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 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 Kevin Danahy.
spk09: Thank you, Tripp. Good afternoon, everyone, and thank you all for joining us. I am excited to provide today's condensed update, as our last call was just over five weeks ago. Mike Koffler, Vice President of Finance, will join me in the prepared remarks to review our first quarter 2024 financial results. Then Robert Duggan, Executive Chairman of the Board, Darren Uecker, Chief Technology Officer and Director, and Mitch Levinson, Chief Strategy Officer, will join me for a question and answer session. During today's call, we will give you an update about our proprietary designed and engineered CellFX NSPFA energy delivery system and three novel proprietary endofactor devices. Q1 was a very active and productive quarter for Pulse Biosciences. As you know, we are making a material and significant commitment to the field of nanosecond pulse build ablation, addressing soft tissue ablation for human beings in need. Pulse Biosciences is pleased to bring into existence a novel electrophysiology and surgical treatment modality that focuses in the nanosecond, up to billions of a second pulse duration range. This is up to two orders of magnitude faster than the millions of a second range currently deployed in the pulse field ablation area. This increase in pulse speed in conjunction with the capacity to increase pulse amplitude is believed by us to potentially bring out material improvements in safety and efficacy, as well as overall significant improvements in treatment times and thus treatment outcomes. Additionally, NSPFA is a very patient, physician, care provider-friendly treatment option. Going forward, we are planning to do multiple clinical trials across different indications. It is important to note that, inclusive of 6,000 human dermatological skin lesions treated, not a single serious adverse event has occurred. In March 2024, we received FDA 510K clearance for our non-cardiac cell effects NSPFA percutaneous system for soft tissue ablation indication. Soft tissue ablation is used by physicians in a wide range of procedures, including the thyroid, liver, breast, and other areas of the body. Currently, we have treated 30 patients in need of soft tissue ablation for thyroid disease. Dr. Stefano Spiazza, Chief of Endocrine Surgery Division at Napoli Hospital Damari in Naples, Italy, our key opinion leader in the field of thyroid, in collaboration with Dr. Ralph Trefano, medical director, head in endocrine surgery for Sarasota Memorial Healthcare System, have successfully performed soft tissue ablation procedures on 30 patients with the CellFX NSPFA percutaneous system in Italy. The first patient was treated in April 2023 and the last patient in January 2024. All procedures were thyroid. Her amended protocols, at our request, We have observed patients as early as one week and up to this point as late as 180 days. Patient follow-ups are weekly for the first four weeks, then 30, 60, 90, 180, and 360-day time points following the procedure. No evidence of scarring or injury to the surrounding tissue has been observed, and patients treated have been judged to be successful. Moving on to the updates of our cardiac indications, starting with our surgical clamp. In the past few weeks, we have communicated with the FDA regarding our CellFX NSPFA surgical clamp for cardiac procedures. The FDA has requested clinical data prior to rendering a final decision in pursuit of our request for FDA 510 clearance. As of today, only preclinical animal work has been performed. No patient has been treated as of yet with our CellFX NSPFA surgical clamp. In present time, however, we have submitted to the Ethics Committee in the Netherlands an application to start first in human feasibility study with the CellFX NSPFA surgical clamp. We anticipate their response within the next several weeks. The study is designed to treat up to 30 patients in several centers in the Netherlands. This study would provide information on first-in-human effectiveness and safety with our device. Our second device for cardiac indication is our CellFX NSPFA 360 degree cardiac catheter. We are pleased to announce that 24 of 30 patients have been successfully treated in Prague by Dr. Vivek Reddy, Director of Cardiac Arrhythmia Services at Mount Sinai Hospital, New York, and Dr. Peter Neutzel, Chief of Cardiology at Homoka Hospital, Prague, and his team in Prague. The remaining six patients are expected to be treated within the next 45 days. The primary endpoints for this study are acute effectiveness at the time of the procedure and add up to 30 days for safety. Discussions with the FDA are ongoing in present time and we will provide updates in a timely manner. Pulse Bioscience will have a strong presence at the upcoming Heart Rhythm Society HRS meeting May 16th to the 19th in Boston. Our CellFX NSPFA energy delivery system will be featured in a total of six poster presentation abstracts as well as a live case presentation. Before turning the call over to Mike, I will now provide additional details on our efforts to strengthen our balance sheet through the rights offering. This offer serves as a stockholder-friendly avenue for Pulse Biosciences to secure the necessary capital to advance our novel end-of-factors towards market entrance, while offering our existing stockholders a potential non-dilutive opportunity to continue to support the company's growth. The Board of Directors has approved a rights offering of up to $60 million worth of units that will be available to all holders of record of the company's common stock, as of the specified record date. This week, the company determined to initiate the rights offering in June or July, not in May, so that the early record date of May 16 will most likely be changed to a date in mid-June. The date will be selected by our board and announced once all the necessary filings have been completed. Subscriptions may begin immediately once the company commences the rights offering, most likely in June. It is important to note that the subscription rights will expire and have no value if they are not exercised prior to the expiration date of the offering, which date will also be announced by the company once the necessary filing have been completed. Assuming that the rights offering is fully subscribed at the initial price, the company will receive gross proceeds up to $60 million, less expenses related to the rights offering, and upon exercise of all the warrants, a potential to raise up to $126 million. A fully subscribed rights offering would fund the company's growth plans into the first quarter of 2026. Please refer to our release on the rights offering for more information. Now I will pass the call over to Mike Koffler for an update on our financial results.
spk01: Thank you, Kevin. Today I will highlight our GAAP and non-GAAP financial results. I encourage you to review today's earnings release for a detailed reconciliation of non-GAAP measures to the most comparable GAAP measures. In the first quarter of 2024, total GAAP costs and expenses increased by $1 million to $10.6 million compared to $9.6 million in the prior year period. The increase in GAAP costs and expenses was primarily driven by an increase in non-cash stock-based compensation expense, which was $1.8 million in the first quarter of 2024 compared to $0.9 million in the prior year period. Total non-GAAP costs and expenses in the first quarter of 2024 increased by $0.3 million to $8.6 million compared to $8.3 million in the prior year period. The increase in total non-GAAP costs and expenses was primarily driven by an increase in research and development expenses to support the advancement of our CellFX NSPFA devices. GAAP net loss in the first quarter of 2024 was $10.1 million compared to $9.8 million in the prior year period. Non-GAAP net loss in the first quarter of 2024 was $8.1 million compared to $8.6 million in the prior year period. Cash and cash equivalents totaled $34.9 million as of March 31, 2024, compared to $44.4 million as of December 31, 2023. Cash used in the first quarter of 2024 totaled $9.5 million, compared to $7.2 million used in the same period in the prior year, and $6.9 million used in the fourth quarter of 2023. The sequential quarterly increase was driven mainly by $2 million in 2023 annual cash bonus payouts. I will now turn the call back over to Kevin.
spk09: Thank you, Mike. It is an exciting year for Pulse Biosciences as we continue to advance our novel platform technology into the hands of more physicians for the benefit of more patients. With these morning calls, we will provide real-time updates on events and interactions as they unfold. Joining me for the question and answer session today are Executive Chairman of the Board, Robert Duggan, Chief Technology Officer and Director, Darren Uecker, and Chief Strategy Officer, Mitch Levinson.
spk07: Operator, please open the call for questions. Thank you, Kevin.
spk04: Now we're going to address a few questions we've received over email. Then we'll open up the line for questions from the audience. The first one is, how's the pilot launch going in the U.S. with the percutaneous electrode now that it's approved? What's the interest level, and when can we anticipate a full commercial launch?
spk07: Yeah. Hey, Tripp, this is Mitch.
spk05: I can take that one. Since our 510K clearance we got a few weeks ago, we've reached out to the KOLs that we were targeting for our pilot program, and the interest has been just really high. We've got a lot of physicians at major institutions that want to evaluate our system for soft tissue ablation. As some of you may know, at institutions like this and hospitals, there's An approval process usually takes several weeks, sometimes longer, to approve bringing in new technologies. We've got multiple KOLs currently working through that approval process. We expect our Cellifex percutaneous system is going to be used in a number of prominent hospitals and clinics by the end of this year. Right now, we are just really focused on building the appropriate training around the system, providing strong clinical support and just ensuring that we are doing everything we can to help our physician customers get the best possible clinical outcomes that they can with our technology.
spk07: Great. Operator, can you please open the line for questions now?
spk03: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Your first question comes from Anthony Petroni with Mizuho Group. Please go ahead.
spk00: Thank you, and congratulations on the progress here. You may be a little bit just on the FDA dialogue. It sounds like that's moving in the right direction. They've sort of given a little bit of guidance here, I think, on just kind of the clinical pathway going forward. And so maybe anything you could add there on, you know, how broad-based, you know, a pivotal program could look like, you know, how many sites, how many patients, and I guess your early views on timing of when this could be launched. And I'll have one follow-up. Thanks.
spk07: Darren, you want to take that?
spk02: Yeah, yeah, sure. Thanks, Anthony. This is on the clamp, right? I apologize.
spk00: Yeah, that would be right on cardiac clamp. Yep.
spk02: Yeah. So, you know, I think as we discussed on our last call, we received an additional information letter from the FDA that led to a couple of meetings with FDA, one that we had very recently. And very collaborative, great discussion with FDA as we're moving this forward. As of today, as we mentioned, we remain in the 510K process. After receiving an AI letter, that goes on hold with regard to the review cycle, as you probably know. And I think we had good dialogue with FDA about the need or request for human clinical data. And so we're really in the process of discussing that with FDA and coming to some agreement on what that clinical program would look like. And likewise, you know, the regulatory path going forward. Right now, we really don't have much to report on that in terms of of timing, one of the things on the clinical side that we have discussed is a first in human feasibility study for our clamp, which will happen in Europe, in the Netherlands, and that we've submitted to the ethics committee there. We expect to hear back from the ethics committee within the next several weeks and then commence that study soon thereafter. You know, we've got a lot going on on that side. FDA is aware of that study. And, you know, we'll just be working with FDA over the next period of time to finalize what's going to be required for the clamp in the United States.
spk00: That's helpful. And then a follow-up would be just on HRS. Looking ahead here, you have a live case with Cellifex. that's being presented post the presentations as well. The market here in the United States is now officially underway with Pulse Select and Farrapulse out there. So what are you expecting out of HRS? And I guess from the perspective of Pulse Biosciences, are you surprised at the rate of adoption by the early PFA catheters? You know, maybe just the expectations on physician feedback for cell effects out of HRS. Thanks again.
spk02: Go ahead, Dan. Yeah, thanks, Kevin. Yeah, I would, I guess I would say, you know, we're really looking forward to HRS. You know, we have six abstract presentations. as you mentioned, and those are both actually on the catheter and our clamp. So, you know, that is something that is very encouraging to get both of our products into HRS for this important meeting. And then as you mentioned, we have a live case in the PFA Summit at the beginning of the meeting. And, you know, as it relates to PFA in general, You know, I think we're not surprised by the progress of PFA and the progress that we're seeing in the United States by those other devices. I think, you know, it seems the data is pretty clear that PFA offers some pretty significant advantages over current modalities. What we're, you know, excited about and looking forward to at HRS is talking about nanosecond PFA And our view that it's sort of a next generation as it relates to PFA and what the differentiation is in terms of the lesions that we create, the integrity and durability of those lesions, the depth of those lesions, the speed with which EPs are able to create those lesions. So all those things we think are going to be really important to both physicians and patients And we're looking forward to HRS to be able to talk about that and present both our preclinical and clinical data that supports those different benefits. So, you know, we think it's going to be a really exciting meeting for PFA in general, but also, of course, for nanosecond PFA and pulse biosciences.
spk07: That's very helpful. Thank you.
spk03: Next question, Robert Lovgren with Medical Hope Productions. Please go ahead.
spk06: Yes, this question is for Bob, a little preliminary. This ablation and catheters and so on is a real surgical coming. Basically, do you feel though that you have all the patents and the head of all the other people, plus of course the machine itself, or you think you're the tip of the spear?
spk08: Well, ahead of Bob and the TIB would be somewhat similar, right? But you really put your patent base together, evaluate it thoroughly, which we're constantly doing. At this point, we're very pleased with what we have and what we are generating. The acid test is when you bring it to market, it's not against the law to develop anything you want. You can copy, you can alter, you can go de novo. But when you bring it to market, that's where the patents really swing in. So we will find out. But I am, yes, I'm Bob Duggan. I'm confident that we're in a good position there. And I like the speed at which we continue to evolve our patent base.
spk07: I hope that answers your question, Bob. Thank you. You're welcome.
spk03: I would like to turn the floor over to Kevin Danahy for closing remarks.
spk09: Thank you, Operator. In closing, I just want to thank you all for continuing to support and giving us the confidence that we have in our company. We are dedicated to delivering value and growth with NSPFA, and we look forward to the opportunities that lie ahead. Thank you for joining us today, and we remain committed to driving success for this company. Thank you.
spk03: This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.
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