CeriBell, Inc. (CBLL) Earnings Call Transcript & Summary

[Audio Gap] Medical Device Analyst at Bank of America. I wanted to introduce our next speaker, Jane Chao, CEO of CeriBell, a newly public company. And so Jane, welcome and go through a slide presentation.

Thank you, Travis. I don't need to -- if you can hear me well. I don't need to be in the mic, right? Okay. Perfect. Well, good morning, everyone. Thank you for being here. I'm very excited to share our story. It's our first time joining BofA conference as a public company. So I'm going to walk you through the unmet clinical needs and our solution, then also the business model, commercial success, also quickly on our pipeline. At the highest level, we invented a novel brain monitoring system that captures the brainwave or EEG. It has the hardware that's very easy to set up. Nurses really, anybody on the bed side can set up in a few minutes, which is a huge improvement of the current standard of care, which I'll talk later. It also have the algorithm front, we call it Clarity. It's AI-powered seizure detection algorithm. For now, the system focus on seizure management in acute care, that's ICU and ED. And that in the U.S. alone is about $2 billion TAM. We also have a very strong pipeline, and that mostly involved EEG signal and AI for indications other than seizure. For now, we still focus on acute care, and that's potentially detecting stroke or delirium in ICU and ED, which I'll talk later, and that significantly expand the TAM. In Q1 2025, our revenue was $20.5 million. We are very excited about a very strong quarter. And active accounts, U.S. only, we are U.S. only for now, it's 558 hospitals, and that translates to 42% year-over-year growth in revenue and gross margin company-wide 88%. Now switching gears, what unmet we are trying to address. Seizure is very common. 1/3 of neurological patients in ICU have seizure. And it also goes beyond neurological patients. So if you look at it, the first one is following convulsive status epilepticus. You're going to hear me saying status epilepticus or status a lot that essentially is seizure lasting for 5 minutes or longer, long seizure and is considered as a neuro emergency. Convulsive seizure means patients having symptoms, right? If patients have a convulsive status, everybody drop everything, run it. But if patient can have status without any symptom, that's nonconvulsive seizure. So 50%, roughly, patients after convulsion would have nonconvulsive seizures. Also goes brain tumor, TBI, post-stroke, these older neurological patients, somewhere between 10% to 30% of them have seizure. Beyond seizure, sepsis patient, post-cardiac arrest patient. The common theme is when patients have a brain -- have a big assault in the brain's autoimmune response. Majority of these patients when they have seizure in ICU, they have no symptoms. So up to 92% of them, they are nonconvulsive. So you have to have an EEG to diagnose. You can't just guess it. And we often say time is brain for stroke and our physician often say this for status. Here's why. If patients is 10, 20 hours, mortality rate can go up as high as 85%. The gray bar is when they survive is a secondary brain injury, often irreversible brain damage memory loss. You might wonder which modern ICU would allow your patients for 20 hours or longer all the time in the United States, in the neighborhood hospitals, you don't have to go to rural area. I'll explain to you why later. The good news is, similar to stroke, if you can detect early and treat early, treatment is very effective. If you treat patients within the first 30 minutes of seizure onset, 80% patients respond. If you just delay that by 2 hours, half of the patients stop responding. So very similar to stroke, early detection is one of the most important factors for patient management here. And that means early EEG, because it's only way you can detect seizure. However, the historical -- the current standard of care for now is the conventional EEG. And this year is the 101-year anniversary for conventional EEG getting invented. Nothing really has changed. It's invented for epilepsy diagnosis in outpatient clinics. It's not invented and designed for acute care setting in ICU and ED where every minute counts. It has 3 fundamental bottlenecks. A, you need the EEG technician to set up. Nobody can do it. Most hospitals, they have a few of EEG tech, Monday to Friday, 9:00 to 5:00, and that's 25% of total hours. So 75 hours, that's not Monday to Friday 9:00 to 5:00, most hospitals have no EEG coverage. It takes a long time to set up. And also EEG monitoring doesn't help anyone. You have to diagnose. And majority of physicians, even neurologists don't know how to read it. So there's a large delay, only epileptologists can read it. So with that, often getting a conventional EEG can take -- it's always taking hours and very common takes days, if patient arrive on Friday afternoon. And that's not what the guideline require, which is about an hour to get rapid EEG, and that's what we changed from having seizure suspicion to getting an EEG setup, it's only 5 minutes. And Clarity, our algorithm would tell right away to the bedside, your patient in status or not in status, and it will continuously monitor every 10 seconds, doesn't get tired. So this is what the device looks like. This is a hardware instead of having EEG tech, nurses, residents, really anybody on the bedside after a few minutes or 10 minutes training, they can set up EEG in 5 minutes or shorter. The device would stream the signal to -- through hospital Wi-Fi through our portal and neurologists can read in real-time. Clarity is the new component conventional EEG doesn't have. That's the AI read EEG constantly. So there's a lot of information. I'm going to show you a real patient case, see how all these features actually deliver clinical impact. This is a real patient case. The first thing you see on the lower left is 1 a.m., majority of the hospital in the United States, everywhere cannot get EEG at 1 a.m. So that already made a big difference. And then within the first 30 minutes, the device turned red and send alerts, say patient is having long seizures. And again, even you get an EEG, majority of hospital 1 a.m., nobody can read it. You have to wait often the next day. In this case, patient was in status. You see the little pink needle there. That's a real bedside annotation. That's when nursing treated the patient with first-line medication of antiseizure, and it happened within a few minutes. That's just very unlikely to happen. And as you recall, patients don't always respond to the first-line medication, right? In this case, in an hour, device came back and say, hey, your patient didn't respond. Patient is still in status. And then take them again a few minutes, they treated the patient. You can see seizure burden drop in real-time and bedside know, okay, patient responded this time and seizure is dynamic at 4:30, patient returned to seizure. And this patient -- and again, they treated right away, controlled the seizure. This patient survived the ICU, let's not stay, gets discharged later. She would have ceased 20 hours easily because you won't get the EEG, you get -- if you're in the good center, you get EEG next day, the neurology read a few hours later if you're a good center. If you're in the under resourced center, you transfer a patient, now it days of delay, almost game over for this patient. And it happens all the time. That's an anecdote. And systematically, we have published many evidence. We did -- the first row you saw is we constantly reduce over administration of antiseizure medication because when doctors know this high mortality/morbidity, they can't get the EEG fast enough, they just empirically treat. And this medication often lead to incubation and ICU admission. So we showed from community ED to large teaching center neuro ICU, somewhere always 40% to 50%, we changed patient management after using CeriBell. That's a big change when you think about it. Half of the time doctors thought they want to incubate, they don't incubate, that's all. Patient seizure-free, they end up having seizure. And then as a result, we show significant reduction of length of stay. The biggest, strongest publication came out last year, 4.1 days length of stay. And each ICU day can cost hospital $4,000 or $5,000. But we also significantly reduced patient transfer. Again, majority of this hospital, Monday to Friday, 9:00 to 5:00, so they don't have an EEG, they transfer patients out. We reduced majority of them. And this -- the clinical evidence and clinical value really translated to our adoption. So this is -- I'm not going to read the number, you can see the past 8 quarters, 9 quarters of our performance. A few things I want to emphasize. You can see every single quarter, we have not just rapid growth, but also very steady growth. We don't have a single quarter that's lower than previous quarters. There's a few factors behind it. One is our business model. We have 25% of our revenue is from the SaaS. So it's a subscription fee hospital pay for our algorithm and seizure detection AI. and that have very high reoccurring rate. The other 75% is all disposable. So that's when they use the headband, that's a single patient use. And it's a very steady usage pattern. That's why we keep seeing a majority of our revenue have a reoccurring and very consistent growth. So that speaks for the strength of our business model. Moving forward, we are very excited about our pipeline. But before we talk about our pipeline -- I don't have a slide for it. I want to emphasize that despite all our great growth, we are only 2% to 3% in the U.S. seizure detection market, right, because the total TAM is $2 billion. So in the next few years, we're going to continue laser focus on seizure in the U.S. in acute care. That being said, we also significantly invest in our future pipeline. So on seizure management alone, we continue more expanding to different -- younger patient population. We already have hardware that covers all the ages, but Clarity until a month ago only covers adult. So last month we very excited, received the pediatric Clarity expansion that covers age 1 and older. It is the first and only FDA-cleared seizure detection algorithm, covers such a young population. A very unique thing is this data was validated, not trained, validated based on 1,700 patients. So, based on FDA record, the biggest by far, patient base that are used for validation of the algorithm and speak for the rigor of our algorithm. We are also working on expanding Clarity to neonate as well. And many pre-needs are subject to having seizure and the neurological outcome for these patients are in many ways, even more significant. Moving forward, as I mentioned earlier, we are also working on making EEG a new vital sign in ICU. So it goes beyond seizure, potentially detect Delirium, potentially triage stroke. Just like if patients have chest pain, you want the EKG on if patients have altered mental status. For a doctor, they can't even tell. The first thing they want to triage and rule out is stroke, then it's seizure and status, then it's altered mental status encephalopathy Delirium. And EEG is the 3richest information you can get of brain functionality noninvasively, and it's the first time our organization has such a big database and AI know-how to look into it. So we could see a big opportunity there. So we continue -- we already have the FDA breakthrough designation on Delirium. We are working on the regulatory path with FDA on Delirium and continue investing in our stroke ongoing studies. So I think that would wrap my presentation. I'm happy to take any questions. All right. Thank you.