Pulse Biosciences, Inc. (NASDAQ:PLSE) Q3 2023 Earnings Call Transcript

Pulse Biosciences, Inc. (NASDAQ:PLSE) Q3 2023 Earnings Call Transcript November 13, 2023

Operator: Greetings, and welcome to the Pulse Biosciences Third Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Philip Taylor, Investor Relations. Thank you. You may begin.

Philip Taylor: 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, November 13, 2023, 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. The risks and uncertainties are more fully described in our press release issued earlier today and in our filings with the U.S. 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.

A laboratory filled with vials and test tubes showing the high-tech drug development process.

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 & 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.

Kevin Danahy: Thank you, Trip. Good afternoon, everyone, and thank you all for joining us. On today’s call, I will be joined by Darrin Uecker, Chief Technology Officer and Director; Mitch Levinson, Chief Strategy Officer; and Mike Koffler, Vice President of Finance. Today, I will start by discussing our progress in advancing our top corporate priority. Then I will hand the call over to Darrin Uecker, to detail our cardiac device development achievements. Mitch Levinson will then describe our extra cardiac business development progress, and then Mike Koffler will review the third quarter financial results before I conclude and open the call for a question-and-answer session. It was a highly productive third quarter for Pulse Biosciences.

In the lab, our CellFX nsPFA technology continues to demonstrate the potential to revolutionize the treatment of atrial fibrillation. In the clinic, CellFX nsPFA is demonstrating the ability to safely and effectively treat benign thyroid nodules. And at the podium, we are pleased to be seeing increased external validation of our technology and presentations from KOLs at various scientific meetings. On the business front, we are excited to have appointed renowned cardiac surgeon, Dr. Niv Ad, as our Chief Science Officer, Cardiac Surgery. Altogether, we’ve done the work in the lab and it has confirmed our value propositions for CellFX nsPFA. As we share these preclinical results awareness of the benefit of CellFX nsPFA is growing, and attracting industry leaders from across the globe who see the positive impact of their engagement and want to be involved with advancing the technology as quickly as possible, to deliver improved clinical outcomes to their patients as well as many others.

Our primary focus is on developing a cardiac ablation catheter and a surgical ablation clamp, both utilizing CellFX nsPFA for the treatment of atrial fibrillation or AF. The clamp will be used during open or minimally invasive heart surgery by cardiac surgeon and the catheter will be navigated into the heart using standard minimally invasive catheter techniques through large blood vessels by electrophysiologists in the EP lab. Importantly, we remain on track with the development of both the clamp and the catheter. While we previously guided that our milestones would occur in the first half of 2024, with the excellent progress to date, we now believe that they will occur by the end of the first quarter of 2024. Our preclinical testing results have validated our confidence in our cardiac surgical plan as we prepare to file a 510(k) submission to the FDA by the end of the first quarter 2024, and to begin the clinical feasibility study for our cardiac ablation catheter also by the end of the first quarter in 2024.

As a reminder, globally, over 1.2 million catheter and surgical ablations are performed annually, and this is expected to grow by more than 10% year-over-year. Still there is a significant runway of adoption for both surgical and catheter techniques because of the safety and efficacy limitations of the current technology, Pulse Biosciences has now demonstrated preclinically, with validation by doctors in the lab, the technological advancements needed to accelerate adoption of both the clamp and the catheter ablation procedures with our novel proprietary CellFX nsPFA technology. This past quarter, we saw a significant extra validation of our novel CellFX proprietary nsPFA technology from predominant cardiac physicians, including Dr. Usman Siddiqui, and Dr. Niv Ad, along with leading thyroid surgeons, Dr. Stefano Spiezia and Dr. Ralph Tufano.

We are thrilled that at the Global EP Summit in September, Dr. Siddiqui shows our CellFX nsPFA circumferential catheter system to highlight Pulse Biosciences’ highly differentiated and advanced solution for electrophysiologists. In addition to our cardiac ablation catheter validation, I am pleased that Dr. Spiezia and Dr. Tufano presented two posters at the American Thyroid Association Annual Meeting, detailing the early results of our clinical study for the treatment of benign thyroid nodules. Specifically, Dr. Spiezia, highlighted his participation in our first-in-human surgical procedures and observations of complete ablation of the cellular tissue without evidence of thermal necrosis or damaged to non-cellulose structures. Dr. Ralph Tufano found the results extremely compelling and suggested that CellFX nsPFA could be a significant advancement in the treatment of symptomatic benign thyroid nodules.

This further validates our believe that CellFX nsPFA is a platform technology that will make a significant impact on patient care. As an additional point of external validation we received in the quarter, we have had multiple surgeons volunteering to join our studies with the purpose of advancing CellFX nsPFA and our novel endofunctors in the areas where they are well respected. We view this positive reception from the medical leaders as confirmation that our CellFX nsPFA technology can have a significant clinical impact in cardiology. We are also encouraged by recent comments and earnings conference calls from companies in the cardiac surgery market and industry analyst, as to the size and growth of the cardiac ablation market, and we believe our highly differentiated solution can capture a large portion of this expanding opportunity.

Doc Ad’s quote says what we all believe, that CelFX-NSPFA has the potential to not only replace all other energy modalities in cardiac ablation, including radio frequency and cryo, but due to the speed, safety and ablation performance of the system, it has the potential to significantly expand the number of patients we treat in cardiac surgery. As awareness of our novel technology sits throughout the industry, we are also incredibly excited to have Dr. Niv Ad, joining our team as Chief Science Officer, Cardiac Surgery. Dr. Ad is extremely well-respected cardiothoracic surgeon and will aid us in bringing CellFX nsPFA from the lab to the clinic, with his years of clinical and leadership roles in cardiothoracic surgery. Dr. Ad brings unparalleled academic experience, helping to launch new medical technologies, which we believe complement very well the clinical experience of our Chief Medical Officer for Cardiac Surgery, Dr. Gan Dunnington.

Dr. Ad’s experience paired with Dr. Dunnington’s industry-leading minimally invasive approach further validates our CellFX nsPFA technology and overall mission to further improve the lives of patients and physicians. Overall, awareness of our preclinical and clinical achievements is leading to external interest in the opportunity to further develop and eventually commercialize our CellFX nsPFA technology platform. These opportunities are only being considered if they align with our business goals, to create value by accelerating our timelines to market and facilitating health innovation that has the potential to significantly improve the quality of life for patients. I will now hand the call over to Darrin to provide updates for our cardiac device development and preclinical performance.

Darrin Uecker: Thank you, Kevin. We are making significant progress advancing our feasibility and preclinical studies for cardiac ablation clamp and catheter programs. Our progress is garnering the attention of KOLs who are actively reaching out to participate in our CellFX nsPFA studies. We are excited to leverage this shared interest to continue our momentum into the clinic and view this external interest as a testament to the immense potential of CellFX nsPFA and future cardiac ablation market adoption. As a reminder, our core technology, Nanosecond Pulsed Field Ablation, integrated into our CellFX platform, is fundamentally different from standard PFA. We believe CellFX nsPFA can deliver safer and more effective ablation of cardiac tissue.

CellFX controls the delivery of nanosecond duration pulses of electrical energy, that’s pulse durations under 1 millionth of a second, to nonthermally cause cells to go through a natural regulated cell death process. The CellFX nsPFA energy pulses are uniquely able to penetrate the cell membrane and alter the function of cell organals, leading to regulated cell death rather than immediately destroying cells, like other energy modalities, such as standard PFA, cryo, which uses extreme cold, or radio frequency ablation, which uses extreme heat. The penetration alters does not destroy internal cellular function while sparing noncellular tissue and leading to a more elegant, precise regulated cell death. This differs from current microsecond ablation technologies where physicians may use suboptimal parameters to protect surrounding cellular tissues, and as a result, sacrifice efficacy for safety.

Our early data shows that the CellFX nsPFA nonthermal mechanism of action, as opposed to thermal, can lead to beneficial outcomes in the clinical setting where physicians do not need to trade safety for efficacy. An additional benefit of the CellFX nsPFA mechanism of action is that it requires significantly less energy per unit volume to ablate cardiac tissue, sometimes up to 10x less when compared to microsecond pulses or thermal modalities, because CellFX nsPFA generally needs less energy per pulse to ablate tissue, we deliver our treatments through electrodes that have a larger footprint, better treatment coverage, enabling faster, more efficient therapeutic resolution. Due to the patient value for time sensitivity in surgery, particularly in cases where the patient is under general anesthesia, reducing even seconds of treatment time can greatly reduce the risk for a patient during and post procedure.

In present time, we believe our preclinical studies and accelerating first-in-human surgical procedures indicate Pulse Biosciences’ CellFX nsPFA devices provide a new and higher standard of safety and efficacy. Our competitive advantage is protected by 148 issued patents globally and 103 pending patent applications worldwide with more on the way each quarter. In the lab, we consistently see the clear advantages in our CellFX nsPFA cardiac ablation plant compared to other energy modalities, as evident by a consistency in achieving transmural ablations in 1.25 seconds, independent of tissue type or thickness, which is roughly a 20th of the time it takes for radiofrequency ablation. The results from our preclinical work support our hypothesis that CellFX nsPFA ablation can produce highly differentiated and market-leading safety and efficacy compared to traditional thermal modalities, including cryosurgery and radiofrequency ablation.

In addition to the speed and consistency of the ablations created by our CellFX nsPFA cardiac clamp, the preclinical data to date supports our intention that CellFX nsPFA has safety benefits over the extreme heat or cold of thermal modalities due to its nonthermal mechanism of action and the lack of any concern regarding thermal spread that could lead to damage of collateral tissue, which is a concern and has been reported with thermal modalities. With the preclinical data we’ve generated to date, we retain our belief that the CellFX nsPFA cardiac clamp provides a significant improvement over current thermal modalities and tracks with our expectations to file a 510(k) submission to the FDA by the end of the first quarter of 2024. Dr. Niv Ad, who joined our team in late October, is bolstering our development and clinical programs by bringing many years of experience in the surgical treatment of atrial fibrillation and minimally invasive heart surgery to the Pulse Biosciences team.

To date, he’s published over 200 peer-reviewed research articles, all while being responsible for in excess of 3,000 minimally invasive cardiac surgical procedures, and we are grateful he has agreed to join our team and to apply his experience and expertise as we move towards the clinic and look to drive adoption of CellFX nsPFA technology in cardiac surgery clinics. Specifically, his academic expertise will play a large role in our future trials focused on optimizing study design and parameters. Dr. Niv Ad’s background is extremely complementary to that of Dr. Gan Dunnington, our Chief Medical Officer of Cardiac Surgery, and his innovative approach in the clinical setting. We are very fortunate to have two of the preeminent surgeons in the field on our team as we advance our product development and clinical studies.

Now on to the progress we have made on our CellFX nsPFA cardiac ablation catheter. This past quarter, we achieved and accelerated key internal milestones on the path to first-in-human studies, completing important preclinical safety and performance studies, as well as the required testing of the CellFX system and circumferential catheter. As a reminder, we designed our catheter to create a precisely focused circumstantial ablation targeted for pulmonary vein isolation in a single 5-second application with CellFX nsPFA, without the need for repeated repositioning and treating, which can be required with other technologies. We believe this capability will lead to a procedure that is easier to perform with significantly reduced procedure times.

In September, Dr. Usman Siddiqui detailed the benefits of our CellFX nsPFA circumferential catheter, at the Global EP Summit 2023 in Cleveland, Ohio. The presentation outlined the differentiated nature of our circumvential catheter, including performing consistent circumferential ablation of targeted pulmonary veins in a single application in approximately 5 seconds with CellFX nsPFA. We look forward to our first in-human feasibility study with our novel CellFX nsPFA circumstantial catheter integrated with a navigation and mapping visualization system. With the preclinical studies and other testing close to completion and the required regulatory approvals in process, we remain confident that this important milestone will occur by the end of the first quarter 2024.

As a final point, it’s important to note that while our cardiac clamp and cardiac catheter both represent significant product opportunities in surgery and electrophysiology, respectively, they also represent a validation of CellFX nsPFA in cardiac ablation, and we believe will be the first of a portfolio of CellFX nsPFA devices in cardiac ablation as we deliver on our goals to provide comprehensive solutions for the treatment of AF and significantly improve the lives of patients. I’ll now turn to Mitch to outline the additional validation we received recently regarding our continuous work to understand the applications of CellFX nsPFA across the human body. Mitch?

Mitchell Levinson: Thanks, Darrin. The Pulse team continues to explore and develop new clinical areas where our novel technology can have a large positive impact on human health. We continue to explore potential new opportunities while prioritizing cardiac ablation, and we’re allocating a large majority of our resources to advancing the treatment of AF. As we reported in August, we started our clinical feasibility study for treating benign thyroid tumors or nodules in the second quarter of this year. This study represents the first time our CellFX nsPFA energy was used inside the human body. We intended to assess patient tolerance, safety and tissue response. In the fibroid study, benign tumors were treated with our novel CellFX nsPFA percutaneous electrode using ultrasound visualization.

Patients were kept conscious under local anesthesia and with the intent to assess tissue response at 90-, 180- and 360-day increments following the procedure. The 90-day evaluation has now been completed, and we’re pleased with the positive results. Ultrasound imaging at 90 days has shown complete resorption of the treated volumes with most of the volume reduction occurring by 30 days post treatment with no evidence of fibrosis or scarring, a very positive finding. One of the problems with thermal ablation modalities like RF or microwave, is that the treated volume shrinks down into a ball of fibrotic tissue that can persist for a very long time. This means that the tumor volume is not completely eliminated and the residual fibrotic ball can look like thyroid cancer under follow-on ultrasound imaging, complicating long-term care for the patient.

Early results from our study were presented at the American Thyroid Association Annual Meeting in Washington, D.C., in late September. Our principal investigator, Dr. Stefan Spiezia, presented two posters alongside Dr. Ralph Tufano, to their colleagues about histological and ultrasound observations immediately post-treatment. The histological assessment findings exemplifies some of the key advantages of CellFX nsPFA technology, including cellular tissue selectivity, well-defined ablation zone margins and the absence of thermally induced necrosis. Dr. Spiezia assessed that the treatment times were relatively short, which aligned with our own expectations, both presenting physicians felt that findings provide an early indication that CellFX nsPFA may be safe and effective for the treatment of benign thyroid nodules.

The reception among the clinical community is uniformly positive. It’s creating enthusiasm for what many are now expecting to be the next breakthrough in the treatment of benign thyroid disease. Based on these very encouraging early findings, we’ve decided to expand the study to enroll additional subjects. Treatment of benign thyroid nodules is a large and underserved market, both in the U.S. and abroad, almost 3 million patients worldwide developed a palpable thyroid nodule each year without being treated. There are about 800,000 thyroidectomy each year worldwide, and the vast majority of these are for benign disease, about 70% to 80%. A large percentage of patients with benign thyroid nodules forgo surgery and thermal oblation because of their inherent risks and scarring.

We believe the benefits of CellFX technology will improve clinical outcomes for many thyroid disease patients and be much more readily adopted by physicians, increasing the number of patients who can be treated. With an optimal clinical solution, we believe the treatment of benign thyroid nodules represents a potential market of well over $1 billion per year. It also will serve as the first foray of CellFX technology into the treatment of solid tumors, potentially opening other critical markets. An FDA cleared product will allow us to validate our value proposition in the important U.S. market. So we’re preparing to file a 510(k) submission with the FDA for our proprietary CellFX nsPFA percutaneous electrode by the end of the first quarter 2024.

We look forward to sharing updates on our continued progress over the coming months. Now I’ll pass the call over to Mike Koffler for an update on our financial results.

Michael Koffler: Thank you, Mitch. Moving down the income statement, I’ll focus my comments on our non-GAAP 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 third quarter of 2023, we reduced non-GAAP total cost and expenses by $7.6 million to $9.2 million, compared to $16.8 million in the prior year period. The decrease in total cost and expenses was driven by the prior headcount reduction and restructuring, and the $7.2 million inventory reserve related to the dermatology business in the third quarter of 2022, partially offset by an increase of $2.3 million in research and development expenses to support advancement of our CellFX nsPFA cardiology devices.

Non-GAAP net loss for the quarter ended September 30, 2023, was $8.5 million compared to $16.8 million for the quarter ended September 30, 2022. Cash, cash equivalents and investments totaled $50.4 million as of September 30, 2023, compared to $58.7 million as of June 30, 2023. Cash used in the third quarter of 2023 totaled $8.7 million, and was reduced compared to $10.6 million used in the same period in the prior year and $10 million used in the second quarter of 2023. We expect cash usage of approximately $8 million in the fourth quarter of 2023. I will now turn the call back over to Kevin.

Kevin Danahy: Thank you, Mike. Now I will provide some closing remarks. Pulse Biosciences is receiving significant support from highly-esteemed physicians in the field of cardiology, who have been impressed with our CellFX nsPFA preclinical study results. We are excited to further build out our medical network as we deliver our novel cardiac ablation devices to market. Two of the top cardiothoracic surgeons in the world, Dr. Niv Ad and Dr. Gan Dunnington, committed to joining our leadership team as the first-hand experience with our proprietary CellFX nsPFA technology. Their immediate commitment shows how our scientific and engineering expertise is indicative of a strong future market adoption of our technology. We look forward to providing additional updates on the next call.

Joining me today for a question-and-answer session is our Executive Chairman of the Board, Robert Duggan; Chief Technology Officer and Director, Darrin Uecker; Chief Strategy Officer, Mitch Levinson; and Vice President of Finance, Mike Koffler. Operator, please open the call for questions.

Operator: Thank you. [Operator Instructions] I’d like to pass it to Philip Taylor for some pre-submitted questions first.

Philip Taylor: Thank you, operator. We’re going to start by addressing a few questions we’ve received over e-mail. The first question is, in your press release, you noted the cardiac milestones between December and end of Q1, 2024. Previously, you stated in the first half of 2024, which I assume is Q1 or Q2. Does this imply that these developments have gone better than planned and are expected to happen soon?

Darrin Uecker: Yes. Thanks, Trip. This is Darrin. I’ll answer that question. So that’s an excellent question. For both the cardiac clamp 510(k) and the first in-human feasibility study for the catheter, there are a number of tasks that have to be completed, including all the preclinical testing, device verification testing, and regulatory safety testing, just to name a few. And for the catheter, there’s an extra step, which is a regulatory step to have the study approved. And all of these tasks carry some schedule risk associated with them. So, as we stated in the prepared remarks, we’re encouraged by our progress, and while there are still a number of these items that, are outstanding and need to be finished prior to either of these milestones being completed, as of today, we believe they will occur sometime between the beginning of December and the end of Q1 2024.

And I’d further add that, we have site approval, the clinical site is ready, and we have MD availability. So, we’re very encouraged by all the progress, we’re making and look forward to updating, as we complete these milestones.

Philip Taylor: All right. Thank you, Darrin. Here’s the next one. I understand from your remarks why nsPFA is potentially superior to PFA. Are you aware of any other companies using nsPFA in cardiac ablation besides Pulse Biosciences? And if not, why do you think that is?

Darrin Uecker: Yes. Thanks, Trip. I’ll take that one again. This is Darrin. Thanks for the question. I’m not aware of any other companies utilizing nsPFA, or specifically pulse field with pulse durations of less than a microsecond, in cardiac ablation. Of course, there are several companies that are using pulses in the tens to hundreds of microseconds, as we’ve noted on previous calls. So there are two important things that I think one should consider when thinking about why we’re not aware of other companies using nsPFA. So the first is, Pulse Biosciences was founded on a large intellectual property and patent portfolio that was acquired from universities that were at the forefront of research and development of nsPFA. These patents include core nanosecond pulse field technology, as well as the application of nsPFA into cardiac ablation.

So, we believe strongly that this IP is very strong. It’s likely something that one would consider if they were going to get into the use of nsPFA in cardiac surgery, or in any other field, and I think it’s also fair to say that pulsing in the — microsecond domain as other companies are doing, has been around for a very long time. And so, that technology is readily available, and it’s likely that there’s less concern about any competitive intellectual property for pulsing in that domain. Second, we also know, having developed this technology over many years, that it requires unique engineering capabilities with regard to the pulse technology endofunctor development, and I’m not aware of any other company that has developed these kinds of capabilities.

So I think – those are just a couple of reasons, why we think it’s likely that there are no other companies in cardiac that, are using nsPFA.

Bob Duggan: Yes. If you might, you could add to that, the very tightknit Pulse Bioscience team has roughly a decade of experience in CellFX controlled nanosecond pulsed field ablation. If you call it a juggernaut, that would be an appropriate description. On top of that, we have our intellectual property patent base and a very dynamic present time IP activities going pedal to the metal. So, we’re pretty excited about the position we’re in. We respect the time it’s taken to arrive at this capacity and the opportunity now looks brighter than it ever has in the past.

Philip Taylor: Thank you both. Here’s one for Kevin. Why is Pulse pursuing surgical cardiac ablation when the market is relatively small compared to catheter-based cardiac ablation?

Kevin Danahy: Thanks, Trip. This is really a great question. We see this as a huge opportunity in cardiac surgical ablation. There are over 1 million open heart procedures done every year worldwide. And then NIH says it’s up to 2 million. So it’s probably somewhere between those two numbers. And what we see is our world-class physicians, Dr. Gan Dunnington, Dr. Niv Ad, they joined our team, because they recognize the quality of our lesions. And what we could create with our nsPFA energy in this game-changing applications in cardiac surgery. And they look at this as an opportunity to really impact that larger number. And that’s a possibility for us in the future. And that’s why we’re so excited about it, and we believe that the CellFX nsPFA can accelerate surgeon adoption.

And finally bridge that gap between safety and efficacy and reduce the OR time significantly. So we see great opportunity for us in the future in this space, and we think this market is ever evolving. Darrin?

Darrin Uecker: Yes, I’ll just add a little bit to that. Thanks, Kevin. So today, it’s estimated, just to give you a couple more numbers, it’s estimated that of the patients undergoing open-heart surgery globally on an annual basis, over 300,000 are potential candidates for surgical ablation. So that’s a market opportunity of north of $1 billion. The interesting number is really that there’s only about 20% of those patients are being treated for their AF today. So according to our Chief Medical Officer for Cardiac Surgery, Dr. Dunnington, this relatively low penetration rate has everything to do with the current technologies that, are being used. And as we’ve noted before, these are thermal modalities like radiofrequency ablation and cryoablation.

These devices have been available for decades, but still have relatively low adoption and penetration. So clearly, there are challenges with their use. And it’s Dr. Dunnington’s belief and our belief that the speed, lesion quality and inherent safety of CellFX nsPFA-powered cardiac ablation devices, starting with our CellFX nsPFA cardiac clamp, that will enable a simpler, faster, safer and more efficacious procedure that has the potential to both expand adoption and increase procedure growth in this market. It’s also true that the catheter market is substantially larger than the surgical market today. But we view this as a single very large opportunity for the treatment of AF where patients will be treated by the EPs, the cardiac surgeons or both.

And as the technology and devices evolve, we think it will shift more and more to a hybrid approach which is why we’re focused on providing our technology to CellFX nsPFA devices to both of these groups. And it’s our belief that we’ll be able to do this, and leverage not only leverage those channels, but look for opportunities, to create unique synergistic treatment opportunities.

Philip Taylor: All right. Thank you. The next question is pretty much the same as the previous question, but for the thyroid market. Mitch, do you want to take this one?

Mitchell Levinson: Yes. Sure, Trip. We’ve now treated 21 subjects with our benign thyroid nodules with our percutaneous electrode in the clinic, and the early results, they’re just super encouraging. And like we said earlier, these clinical results, the safety, the prospect of clearing the entire module without leaving that fibrotic ball. All of that, in our opinion, makes our solution just – it’s just a lot better than surgery, or any of the current ablation options. And the thyroid market itself, it’s big. Peer-reviewed articles estimate about one in 1,000 people worldwide, that’s millions of people each year, suffer from symptomatic thyroid nodules. And most of these go untreated. We welcome all of them to the world of patient and physician-friendly treatment, and that’s what we’re shooting for with CellFX nsPFA.

About 800,000 thyroidectomies are done each year, that’s where they’re getting half, or their entire thyroid removed. But most of these patients choose to just live with their condition, instead of having surgery for some people, the cure might be worse than the disease. We think that not only are we going, to be able to address a lot of these thyroidectomy patients, but because of our better safety, the efficacy and the healing profile, we think we can reach a good number of those 8 million “watchful” waiting patients. And we also think our procedure is going to be just really teachable and reproducible. That’s going to allow us to enter the market, and grow this new market quickly. And not only do we have, this large opportunity for thyroid nodules, but this is also going to open the opportunity, for a bunch of other applications, including treating other types of tumors.

Philip Taylor: All right. That’s it for our submitted questions. Operator, we can open up the line.

Operator: Okay. Our first question comes from the line of Robert Lovgren with Medical Hope Productions. Please proceed with your question.

Robert Lovgren: Yes. It’s very interesting that you – all the stuff that talked about here. We got a couple of questions here. First of all, safer and faster. And I guess it’s — what I’m told is, easier to do basically for initial electro-physiologists to do it where they’re just starting out. In addition, have you sort of thought about an Advisory Board, Scientific Advisory Board? And then this papers business is they’re — I wished you put those papers up on your website, so we can read some of those papers. And then what about the company that you’re in business with they’re developing, is that part of the process? I forgot the name of the company, but, hello?

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Q&A Session

Darrin Uecker: Yes Bob, this is Darrin. I’ll tackle some of these. There – looks I think you have kind of four questions here. So let me see if I can go in order. Yes, so the first one you mentioned is safety and speed. And so, I think this is a general capability of nsPFA, both on the catheter side and on the clamp side. And by safety, generally, what we mean by that is our system, or this technology is completely non-thermal. So a lot of the safety issues that you see in ablation, in cardiac ablation in particular, have to do with the fact that thermal modalities are used. And when you’re using a thermal modality…

Robert Lovgren: Irreversible and reversible, this is reversible. Nanopulse is the only one that’s reversible?

Darrin Uecker: Yes. So there is a reversible component to it, but the safety really has to do largely with the fact that we don’t have any kind of thermal spread, that thermal spread is something that can – when you’re doing cardiac ablations can reach the esophagus and nerves and other critical structures. And of course, we’re non-thermal. So, we don’t have that aspect. And on the speed side, speed has been demonstrated by us and others. It’s a very fast technology in terms of the speed required to do the ablation, and substantially faster, many times faster than what you see with radiofrequency ablation, or cryosurgery. And really, speed isn’t just a convenience. It’s also a safety component. So, the faster that you can perform these procedures, the sooner the patient gets out of anesthesia and back on their feet.

So, I think there’s a safety component that has also has to do with the speed. You mentioned a question about would we have an Advisory Board, we’re starting to build that team. So you’ve heard about Dr. Dunnington and Dr. Niv Ad, and some of the other EPs that we’re doing work with. And so we’ll certainly over time, build what we believe will be a top-notch Advisory Board, likely both on the catheter side and on the cardiac surgery side. And that will come in time as these things evolve. You asked about papers and getting the papers posted on our website, which we very often do sometimes, we have to make sure that whatever the society or scientific meeting that that publication exists in is, okay with us publishing it on our website. But when they are – and we try to make that happen every time, we certainly will do that.

And lastly, I think you’re referring to a partnership that we have ongoing with our catheter to deliver mapping and navigation technology. And we view mapping and navigation as kind of part of the overall system that, needs to be delivered into the EP, to do these ablations with catheters. And so, our first in-human activity, we will have a mapping and navigation partner along with us. We’ve integrated our technologies together, to provide a really physician-friendly and what ends up being a patient-friendly solution. So, I think I got through the four questions that you had, but if not, let me know.

Robert Lovgren: Okay. Thank you.

Darrin Uecker: Thanks Bob.

Operator: Our next question comes from the line of Jason Smith, a Private Investor. Please proceed with your question

Unidentified Analyst: Congratulations on making fantastic progress on bringing nsPFA to patients. It’s just been awesome to watch the evolution of the progress taking place. My question is whether the patents that are originally held by FARAPULSE or other standard PFA patent holders, is broad enough to potentially cause patent infringements by Pulse Biosciences?

Darrin Uecker: Yes. Thanks, Jason. I wouldn’t want to comment at all on patents by any other patent holders specifically, we spend a lot of our time and energy, and we invest a lot in our patent portfolio. We invest a lot in our product design, and we invest a lot in doing everything, we can to ensure that any of these markets are open, to our products. And so, I think that’s the best way for me to handle that.

Unidentified Analyst: Okay. This is fair enough.

Bob Duggan: Jason, this is Bob Duggan. Just the process of embedding a patent is inclusive of validation of its appropriateness. That doesn’t mean after the fact one can’t bring that into question. But it’s no small task to get through the patent filter. So with 188, 148 in hand, 103 pending and a very rapid set of developments, developments that, are application specific to CellFX and the nanosecond pulse. We’re in pretty good – we think we’re in a pretty good position, time will tell, but we do not consider our business to have a significant or serious patent risk at all. We think we’re very strong in that area.

Unidentified Analyst: Perfect. Well thanks for my mind the equilaterally shares?

Bob Duggan: Yes. I think the biggest factor is when you touch the patient, is it safe? Patients who are really reluctant to go from a current condition to a surgical procedure, if it’s not say, then it comes, is it friendly. But if that – those two questions are answered positively for the patient that is equally important, if not more important, is it physician-friendly? That’s why you see 8,000 procedures today done robotically when we used to celebrate back in the day when we started our company in [indiscernible]. We have one procedure done every other week, time has changed. But safety, friendliness to both — friendliness is our true ally to the patient and to the physician and thereby, and therefore, it is scalable. So when you have else coming into the business as they are, the dozens that they are making [technical difficulty] of it not to be underestimated how positive that is.

So in this case, we’ve treated over 7,000 lesion. Now, we’re treating some very specific areas of the heart. And once that’s done, you’ll see acceleration of our activities, and we await those opportunities and the timing is coming close. I can say that to when that will happen.

Unidentified Analyst: Fantastic. Well keep of the good work you guys. Very much appreciated.

Bob Duggan: Thank you. Jason.

Operator: There are no other questions in the queue. I’d like to hand the call back to management for closing remarks.

Kevin Danahy: Yes. Thank you. One of the things I just want to close is to say, the past quarter has been outstanding for us. And we’ve done the work in the lab. We’ve done the work in the clinic, and we’ve done the work on the engineering side, and we’re extremely excited about where we’re going with nsPFA, CellFX, and we’re really excited to bring these results to you. So stay tuned, keep watching us. We are really passionate about what we’re doing. We think we’re highly differentiated. We have a robust IP portfolio strategy. It starts with our energy. It goes from the energy to the console, from the console to the endofunctors, from the end of endofunctors to the patient. And we think that we’ve done an amazing job there. So continued ask questions, stay engaged, and we will continue to communicate. And we thank you for – all of you for joining the call.

Operator: Ladies and gentlemen, this does conclude today’s teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.