ClearPoint Neuro, Inc. (CLPT) Earnings Call Transcript & Summary

Great. Thanks, everybody, for joining us for the next session here in the med tech track of the UBS global financial -- sorry, global healthcare conference. I'm not a financial analyst, I cover med tech actually. So next session is with management from ClearPoint Neuro, and I'm really pleased to be joined by Joe Burnett, the President and CEO. And then we'll have for air cover in the background, Danilo D’Alessandro, the CFO, to help answer any questions if there are ones that, for some reason, Joe can't get to. But first, guys, I just want to say thank you so much for joining us today, and welcome to the presentation.

Terrific. Thanks, Matt. And Danilo's name just rolls right off your tongue there. That was very well done.

Well...

He's smiling. You put a big smile on his face. So...

Sure. Well, I agree. So for this session, we're going to do some questions later, but to give you a chance to go over some slides and give us an overview of the company first. So why don't I let you jump right in? And then I'll sit here in the background and come back with some Q&A.

It sounds great, Matt. Yes. So just to frame the company, first of all, we're very excited to be presenting here at the UBS this year. We've got a lot of very exciting things happening here at ClearPoint, but most importantly, we're always putting the patient forward. And there are millions of patients suffering from some of the most severe debilitating neurological disorders. As you can imagine, I promise you, everyone on this call who knows someone personally suffering from Parkinson's disease or essential tremor or epilepsy or tumor or things like that, so our purpose as a company is to always put the patient first. And we're having a lot of fun and diving into that purpose as well. So just to provide a little background of the company, maybe if anyone is following along on the slide deck, you can go to Slide 3, up at the top of the web page there. But effectively, the way we position ClearPoint is that it's 2 opportunities. So on one hand, you have a traditional med device company, as you can see on the right-hand side. We are expanding our portfolio where we sell navigation. We sell additional therapeutic products, ancillary enabling products, et cetera. And we feel like today, just looking at the portfolio that we currently have committed to, there's a total addressable market north of about $500 million. So a real opportunity for a smaller company like us. And then on the other hand side, we're also a platform biologics and drug delivery company. So in this case, we've partnered with more than 30 different companies in the gene therapy and stem cell space, in which case, we provide both navigation as well as a very unique cannula through which these biologic agents are provided. So we believe this has a significantly more than $1 billion total addressable market, a very, very exciting space with very well-funded pharmaceutical partners in our -- sort of in our current portfolio. And that part of the business is growing very rapidly, having doubled in 2020 despite all of the headwinds that we see in COVID. So again, it's really 2 different opportunities, but they are connected by the same platform in ClearPoint, which is an MRI-guided navigation system, very, very unique in the way we approach this particular problem. And it's also connected by our people. So we're one of the very few navigation companies that provides an employee there to help assist in each one of the procedures, which again increases our ability to carry additional products through our channel and ensure that each and every one of these products goes -- or procedures goes as well as it possibly can. So if you move on to Slide 4 here, this is just a quick summary of the company. We're about 70 employees today based out of Solana Beach, California, with our manufacturing and R&D facility in Irvine, California. We have about 25 employees that are actually field-based, as I mentioned, that are scrubbing into these procedures and assisting the surgeon and the rest of the surgical team. The business model itself is very much a razor-razorblade model. So more than 85% of our revenue comes from single-use disposable products and services that we provide to these partners. Okay? So if you think of it as the razor portion of what we do is a computer workstation, which enables a hospital to use our technology, and that can range anywhere from $150,000 to $200,000 per system that goes in. Once that system is placed, then the disposables are used on a per-procedure basis. And those can run anywhere from $6,000 up to $18,000 per procedure, depending on how many navigation systems are used, how many therapeutic devices are included, et cetera. So it's very much a razor-razorblade model. Similarly, we are approved in both the FDA and CE Mark. So we are currently in the process of expanding into Europe as we speak. Just from a background situation, we did about $13 million in revenue last year in 2020. We provided a forecast this year of between $16 million and $17.5 million. And we currently have about $65 million of cash on hand, the result of net proceeds of a public offering that we did in February of this year, which we just closed. Okay? So if -- just to give you a little summary of the product itself, if you go to Slide 6, this is really what's the unique tool that we offer. It's the ClearPoint Navigation System itself. And most neurological procedures or neurosurgical procedures today are done in the operating room. And if they're done in the operating room, that means the guidance system they use is either an open surgery, where the surgeon is actually looking at the grain tissue with their own eyes, or they're using a more friendly technology that's easier access, so an X-ray or a CT scanner or optical navigation. So these are the tools that are commonly used for neurosurgery procedures today. However, they all have one severe limitation in that X-ray and CT does not delineate between the very subtle structures of the brain. It doesn't really call out soft tissue the way that an MRI can. So the preferred neuroradiology tool that's used today is MRI. However, to do a surgery inside of an MRI magnet, that creates some very significant challenges. You're pretty much doing a procedure inside a microwave. So you can't have any metals or any hard metals in there. You need to use plastics and ceramics and other MRI visible fluid. So that's really what we provide. And you can see here on Slide 6 is a complete and total navigation system, software, hardware, disposables, et cetera, that enables the entire surgery to be done inside of the MRI. So the surgeon is never wondering if they're actually in the right place or if they're delivering the therapy properly. They can see visually on that live MRI image, and then they can document it properly in the permanent patient record. So our system itself is made all of plastics, ceramics, as I said before, MRI visible fluid. But again, it enables that real-time imaging. So you can see your target, you can find the safest trajectory, and you can confirm the delivery of whatever that therapy is. And there's a number of different types of procedures we operate into today. So if you go to Slide 9, you can kind of see a quick summary of that. On the biologics and drug delivery side, so in that case, we provide the navigation as well as a very unique cannula through which the drugs are delivered. And this cannula aspect is a very, very important part of our story because the cannula is both blood and drug contacting. So what that means is that it's very likely that when the very first gene therapies are approved for neuro, they will be approved as a combination device where the drug is approved to be delivered through our cannula because our cannula is what was used in the clinical trials, in the toxicology studies, the preclinical studies, et cetera. So here's just a list of 6 or 7 sort of companies that we've partnered with that we have publicly announced. We do keep account of those, however, and there's about 30 different partners that we have today that are active customers and we're in active agreements with. There's about 70 additional companies that we do not count as a partner or an active customer yet, but that we're currently calling on today. So that's what we're doing in the biologics space. We also do quite a lot with deep brain stimulation. So similar companies like Medtronic and Abbott, Boston Scientific and NeuroPace, they make deep brain stimulators that are used to treat primarily Parkinson's disease and essential tremor but are also being explored in epilepsy and severe depression and obsessive compulsive disorders, a number of different neurological problems as well. So in that case, we -- again, we don't make the pacemaker or the DBS system ourselves, what we make is the navigation system that will take those leads and get them in the safest possible way to those deep targets of the brain where the stimulation can actually be delivered. And then the third bucket of procedures that we participate in today are laser ablation procedures, and these are used primarily for epilepsy patients where you want to ablate the region of the brain that's causing the seizure or tumor patients where you'd like to destroy the tumor and then follow up with some kind of drug delivery biopsy, et cetera. So the most 2 prominent players in this space today are Medtronic's Visualase system as well as Monteris. Because these procedures already take place in the MRI, we've made the decision that we want to enter the laser therapy market ourselves. So we've partnered to create our own laser system, which we believe we'll be doing first clinical cases sometime in 2022. Now Slide 10 just shows our active installed base. So we have about 60 some-odd sites that are actively using our equipment today. You can see the names on that list, and they're certainly predominantly in the United States. As I mentioned, we're currently in the process of moving into Europe. That's a very important strategic decision for us because many of our pharma and biologics companies, they would like to use ClearPoint in their clinical trials. So we need to have a presence in Europe if they want to be able to enroll patients on that continent. So we expect to be at about 100 centers by the year 2025. And our current funnel of potential customers that would be adding ClearPoint to their neurosurgical sites is larger than it's ever been. So despite the slowdown that we saw in COVID as far as installing and opening new sites, it really hasn't deterred the interest of getting started. And we believe in the second half of this year, we'll be placing pretty significant number of new installs. Now just a couple of more slides before we get to kind of the chat with Matt here. But if you go to Slide 13, I think it's an important one because it really highlights how a small company like us is really playing a much larger role in the advent of gene therapy and stem cell delivery for neuro. So we've partnered with a number of different companies. And if you look at all the publicly available data as far as when the potential starting dates for a commercial launch of gene therapy or stem cells is present, we seem to have partnered with a number of those early adopters and those early technologies. And what's interesting is many pharma companies, they spend a lot of their time dealing with neurologists, dealing with patients, dealing with reimbursement, gene therapy is often their first foray into any sort of surgical intervention. So what they see with us is a partner that cannot only provide devices for the navigation and the delivery, but also a commercial partner as well. An example of this is a company called PTC Therapeutics who has effectively hired us to be their neurosurgery channel so that they can focus on the neurologist and on reimbursement and allow us to represent them in the lab to do training and education, marketing, everything to the neurosurgeon itself, which is an interesting spot for a smaller company like us because it allows us to sort of play air traffic controller and determine which hospitals are going to be these early centers of excellence that are capable of delivering these novel drugs. And there's -- I can tell you there's tremendous excitement in the medical community, not just the investor community on what's possible with gene therapy and drug delivery as well. So this is a very, very exciting part of our strategy. And then one last slide I'd like to bring you to. It's one of the new slides that we just uploaded this morning, it's Slide #22. As I mentioned, we had just gone ahead and closed a significant financing for our company, about $50 million or so pre-proceeds. And what that really allows us to do is to commit to executing our product pipeline. In the past, we would have had to decide on timing and decide on priorities, but with this new capital that we raised, it allows us to go ahead and commit and present for the first time, time lines around a number of different procedures that you see here. Many of these products are designed to do a few different things. One is to speed up procedures so that you can do multiple procedures inside the same magnet on the same day, as an example. Secondly, we want to make sure that we can actually demand more revenue per procedure. And what I mean by that is instead of providing navigation and then allowing another company to provide the therapy, we're going to be providing our own therapies like laser, like biopsy, like micro electric recording, things like that. So that's another important part of it. And then the third part is that because this is a platform and it applies to so many different types of procedures in the hospital, as we complete this portfolio, to really be a modern neurosurgical center, doing drug delivery, biologics, DBS, laser ablation, biopsy, all of those types of things, you're going to want to have access to ClearPoint because ClearPoint is not only going to be in the MRI suite, but we're actually expanding into the operating room as well, where many of these -- the vast majority of these procedures are done today. Okay? So with that, I'll go ahead and kind of pause. And Matt, maybe I'll bring you back into the conversation, and we can have a little chat here.

Sounds great. You guys hear me okay?

Yes.

Perfect. All right. So there's a number of things I want to go through and kind of double click on the presentation that you gave there. Maybe to start, if you could talk just a little bit about the trends you can see from presentation. You had steady growth over many years in the procedures that you're supporting. A little bit of disruption last year with COVID, as anyone would expect. Could you just give us a sense for how the business is performing today in the kind of recovering -- the recovery that you're seeing post-COVID that's informing your outlook for the year?

Yes. If you want to follow along on Slide 25, we've got that -- a little bit of that data presented there. But you're right, COVID was painful for us last year. I believe most of our procedures outside of tumor, so treatments for essential tremor, Parkinson's disease or epilepsy, these are chronic disorders that the patient has been living with for quite some time, so they were decided to be elective procedures at the time. And we lost about 90% of our procedure volume back a year ago in April and May. So we've absolutely seen that rebound. I think, at the beginning of this year in the first quarter, we could not quite say that we were at pre-pandemic levels. I think we did about 215 cases in the quarter. However, as we see Q2 progressing, we believe the vast majority of our hospitals are absolutely open, doing procedures again. And we've communicated that certainly in the second half of this year, we will be -- we will return to growth from a procedure standpoint. And the way I'd kind of bring that up is if you think about procedure volume, that correlates very well to our disposable business. So as procedure volume returns, our disposable business is returning as well. As I mentioned earlier in the presentation, our biologics and drug delivery business actually never slowed down for COVID. In fact, it doubled in 2020. So even -- and that's despite the fact that many of the clinical trials exploring gene therapy and stem cells were put on pause for the pandemic. So really, it shows some of the expansion that we've had into additional services, where we provide preclinical planning, we provide regulatory consulting, we provide commercial launch planning, all of those different things. As we add additional partners, it allows that biologics revenue to expand as well. So I think that's been positive. The only thing we're still kind of, I would say, paused a little bit on is the placement of new capital systems. So where we have seen elective procedures open up at these hospitals, hospitals are just now willing to test and try new technology because it's again becoming a priority for them versus counting ICU beds like they have been for the last 18 months.

Got it. Great. I think you touched on most of what I wanted to cover there. But on the finer point, you said, I think, in Q1 that things improved through the quarter. Could you give any color on recent trends in terms of the procedural recovery? And are you fully back to normal in terms of capital placement? Is there a little bit more to go there?

Yes. So on the case volume, I would say that March was higher than February, which was higher than January. So we saw a progression of more cases returning. And by the end of March, more than 95% of our procedures or our hospitals, I would say, have kind of returned to normal and seeing patients. So I think that's very positive. On the capital side, if we think about something that could impact our 2020 or 2021 forecast, capital is really the wildcard. Because generally, the way our process works is that we install a system, we sign an evaluation agreement and they do a 3-month evaluation where they purchase disposables. But at the end of that evaluation, they have to actually purchase the capital. So the bigger question is, as it impacts 2021, are we going to get that check for that PO for the capital by the end of this year? Or is some of it going to slip over to 2022? So it's really just the timing at the end. But the most important metric for us is, are they signing the evaluation agreements and are we getting them installed. That's the most important thing because, again, the razor-razorblade model is -- the disposable portion of it is the most powerful part of our model.

Correct. Got it. Just taking a step back, and you talked about this in the presentation, but the accuracy, the compatibility of your system are really key for enabling a lot of these procedures given the precision required, whether it's neurosurgery or the future of the drug placements. Could you just spend a minute on at a high level or maybe a third grade level, what are the things that really enable you to be so accurate and differentiated? Why is this really hard to do? Why are hospitals willing to pay you so much to be able to enable these procedures?

Yes, happy to do it. And I think one way to think of it is indication by indication. So let's talk about biologics because that's not just a hospital that sees the value in our technology. It's also the pharma partner. So there's a few different things that our system can kind of help uniquely do. Number one is that, again, in many of these disease states, we are trying to treat with drugs, so it could be Parkinson's or essential tremor or epilepsy or rare childhood genetic disorders. In general, there's a very specific target that you would like to deliver the drug to. It's different than Alzheimer's or something like that, where you might want to bathe the brain in the drug. In this situation, you've got a very, very expensive drug that could be toxic to other parts of the brain, and you want to make sure it gets to your target and only to your target, right? So being able to look at a live MRI image and choose your trajectory that's the safest possible way and be able to finally take a picture at the very end before your injection that shows the needle or the SmartFlow cannula that we manufacture, they're at the target. Again, from a surgical standpoint, from a pharma company standpoint, that removes any ambiguity where maybe you could miss in the operating room. So I think that's one important element. The second element is that because you're doing under live MRI image, you can pick up hemorrhage. So there's very, very rare that it takes place, maybe less than 1% or 2%. But as you're putting a cannula or a stylet or a DBS lead through healthy brain tissue, it's always possible that you can cause a hemorrhage. And if you're looking at a live MRI, you see that immediately, and you can adjust the procedure appropriately as opposed to doing it in the operating room where maybe you find out 6 hours later that there was a bleed that you didn't know about. So safety during these very expensive clinical trials is crucial. And again, this helps control some of those variables. And then the third one on the drug side, which is arguably one of the most important ones is actually tracking the infusion itself. So not only the making sure that the cannula is in the right spot, but as you're injecting the drug, being able to see the drug and be able to calculate the volume of coverage. So let's say your target is a structure called the putamen, and your protocol is to cover 80% of the putamen with the drug. If you're doing it in the operating room, you simply can't calculate that. You can't see it. If you do it in the MRI suite, you can actually see it live and know not to stop the infusion until you've reached your target. So it's -- all of these things together make this live imaging and documentation important because imagine charging $500,000 for a novel gene therapy for a genetic disorder and the patient not responding. You want to understand exactly why that patient didn't respond. So this total sequence of events that is characterized in the patient record is really crucial.

Great. It really helps to elucidate it a little bit better. Could you also just discuss the competitive environment? I mean, maybe even taking a broader view, but are there other approaches, devices that you view as being competitive? And what are some of the things that really help you stand out versus those alternatives?

Yes. I mean I think most of the alternative technologies that are out there don't take place in the MRI suite. We're kind of the primary player there. Most of the procedures or other navigation tools take place in the operating room. So they're either optical navigation or CT-guided. So these would be things like the Medtronic StealthStation or the Brainlab system, the Mazor robot, the ROSA robot, the [ Lexelframe ]. So it's kind of a crowded space, but there's no real go-to technology. I don't know of anyone that we can claim they have more than 15% of total procedures. And that's why we think this is a place that we can operate as well. So our newest system, the SmartFrame Array, which was just -- we just announced a week ago or 2 weeks ago, FDA clearance in the first human cases, that is a system that's actually designed to be used in the operating room as well. So it will allow us to no longer be isolated to only sub-10% of the procedures today that are done in the MRI suite. It's going to give us a license to go after the other 90% of procedures that are currently done in the operating room. So that's a big step for us. And again, 90% to 95% of the [ pathology ] and the workflow and the software will be the same in either environment. So our belief is that we'll be able to go into some accounts that only do OR procedures today, get them familiar with ClearPoint and then start to pull some of those patients into the MRI suite.

Right, right. Yes, that's kind of helped. That's an interesting slight pivot in the strategy. Can you talk about how that's resonating with customers, just the broader applicability of the new system? And how can you use that as a hook to get them into MRI over time?

Yes. I think it's -- I mean, I still think our message is clear that we believe the most precise tool possible is doing live MRI guidance. That's where we started. And I think it's somewhat -- it's tough to argue when you can actually see that live MRI image and do all of the confirmation. That being said, not every procedure has needs that level of accuracy. So for example, if you're doing a biopsy of a large tumor, you don't need sub-millimeter accuracy to take your sample from that tumor if the tumor is 3 centimeters in size. That's something that can certainly be done in the operating room. So that's why we want to provide not only the navigation but also the biopsy needle and the smart biopsy needle so that we're, again, sort of commanding larger chunks of the revenue on that per procedure base. So from that standpoint, I think it's a very logical approach that we're taking. From a customer standpoint, I think they appreciate it because they've been thinking that way all along. And now we don't have to come out as a company saying, "Hey, there's only one way to do this technology." We can simply say, "Look, we have a total portfolio that will solve your MRI or your OR needs. You as the doctor wearing the white coat can simply choose how to treat that individual patient that's presenting in your lab that day." It's more like a Swiss Army knife is I think the best analogy. We'll have all of the different tools as opposed to forcing you into one environment or the other.

Right, right. No, that makes sense. And then can you talk about when you try to differentiate versus the competition or show the value in some of the more specific indications where you need to be very active, some of the data that you've used and been able to generate to show that to customers? Or just how do you sell folks on the value proposition?

Yes. And again, it's a little bit different indication by indication. Some of it's workflow improvements, some of it's accuracy improvements, some of it's sort of secondary endpoints. So what I mean by that is there's a lot of exciting technology in the DBS space: Medtronic, Boston Scientific, Abbott NeuroPace, where you usually hear about directional leads quite a bit, where you place a lead and then over time, you can program it to get the best results. Well, the reality is, is that the reason you want to have a directional lead is to overcome a miss that you might have had in the operating room. So it's almost like saying, "Hey, I missed my target by a centimeter and the way that I can overcome that miss is to program that patient over time and send the electric -- the current into a specific direction to get back to the target, right? So if you're using our technology, I mean, our average miss, if you will, is less than 1 millimeter. Our accuracy is normally about 0.4 or 0.6 millimeters, meaning you are in your target, and you can turn it on and the patient actually respond well to the therapy immediately as opposed to having to come back over and over again for repeated visits. So I think that's one way that I think not just the neurosurgeon, but the neurologists, the referring neurologists sometimes is pleased with. And then secondarily, remember, if you are -- if you have a miss and now you're delivering electricity across a larger area, you're opening the door for additional side effects. A lot of times, the patients -- if you have Parkinson's disease and you can control the tremor and you can control the patient's gait and the patient can sleep again, they're willing to deal with other side effects, but the reality is some of those side effects would be unnecessary. So I think as time progresses and we better understand these side effects and document them with better data analytics, I think you're going to start to see, "Hey, let's just not miss and get into the right spot from the very beginning." And then the third part that comes up quite a bit is battery life. So you have to remember a lot of these DBS systems, they have a battery that's supposed to last about 5 years. And every 5 years, you have to come back in for another surgery. Well, if you miss and you have to up the voltage or up the current, that means that battery is not going to last as long. And we have -- certainly have situations that in some of our surgeons that have seen patients where the battery doesn't last 5 years, it lasts 3 years, and now you're coming back for repeated surgery much more often than was intended. So those are the types of things that I think really help us to show the value. The one thing I would bring up, too, in the DBS example that I think is important is that the patients that we treat inside the MRI suite are asleep for the procedure versus many of the -- most of the -- majority of patients treated in the operating room are left awake so that they can test the stimulation since the accuracy isn't quite the same. So again, if you went to every single patient and said, "Hey, would you like to be a wake or a sleep for a 4-hour brain surgery?" I know which one I'd pick. Matt, I probably know which one you'd pick, but the reality is that the starting point are patients that are simply so anxious about the surgery that there's no way they could do it awake, they immediately become candidates for this asleep MRI procedure. And I think you're going to see that transition continue to take place over time, given that probably 15% to 20% of procedures are done asleep today. As we continue to collect more data, continue to get better indications, I think you're going to see that number continue to pivot.

Super. All right. Thanks for that overview. So I wanted to point investors to spend some time on the bubble chart that you showed in your presentation because there's a couple of impressive things. I think one is the size of some of these targets that you're going to be looking at over time. And the other, as a prelude to that is we formed a lot of good partnerships with well-established companies. So maybe we could just spend a few minutes on marrying those 2 things together. To the extent you can talk about some of these partnerships, why don't you highlight a few of them for folks? And then talk about the cadence of data and of launches over the next few years in some of these bubbles and what that could start to mean for the company and proving out your thesis here?

Sure. Thanks, Matt. So yes, so we're very excited about drug delivery. I think a lot of the interest in the company that's popped up, certainly, recently in the last 12 months has been the view that we are not just a device company, we're really this platform biologic company. It's akin to companies like Cryocord or Lonza, where they don't make a drug or a biotech -- biologic themselves. They make an enabling technology across a number of partners. So Cryocord handles all the transportation of these drugs. Lonza handles the various manufacturing sites of these drugs, those types of things. So we're following the same strategy where we are the navigation and delivery across a number of different partners. And from a biotech standpoint, investing in an individual platform is always a little bit risky. There's not a single neuro gene therapy approved today as an example, right? So to date, no one has quite been successful. So to invest all in sort of one of those opportunities obviously carries some risk where investing in ClearPoint is a way to invest across a portfolio of 30-plus companies so that if 1 or 2 of them hits, it can become incredibly meaningful for a company our size. And it's important to note that even embedded inside of those 30 active partners that we have today, it's incredibly rare that a partner only has one indication that they're going after. It's more common they have their own platform of drugs. So for PTC, for example, we are working with them on AADC deficiency syndrome, on Friedreich's ataxia, on Angelman syndrome, on Huntington's disease. So we have 3 or 4 different shots on goal even within one of those partners. And similarly, we have overlap on some of the big markets as well. I think we have 4 or 5 companies we're working with on Huntington's disease, similar with Parkinson's, similar with tumor treatments, et cetera. So it's almost like we would love for all of our partners to be successful. But if we can just get 1 or 2 partners in each indication and cross that finish line, it's going to be incredibly meaningful for a company our size. So that's something we're very exciting about. From a timing standpoint, you kind of noticed there's 2 buckets there, right? There's the early bucket that are smaller opportunities, which are generally rare childhood genetic disorders. This is important because these are patients where they really have no other option. So I'll talk about AADC for a second. This is a rare childhood disorder. There's maybe 5,000 to 7,000 patients on the planet that have it. It's often fatal. So normally, these kids live to be about 6 to 8 years old, and then they pass away at that period of time. So it's about 700 to 1,000 new cases of this each year. These children spend 50 to 75 days a year in the hospital. There was a great publication that just came out, a very important one just a couple of weeks ago, showing the social and economic impact in the families that have children with this disorder, how it's often at least one of the parents immediately has to quit their job to caretake for this child. The burden on the health care system is obviously significant. So if you're a regulatory body, you're looking at these kids, and you know that there's no other alternative treatment, you're going to be a little bit more aggressive as far as getting it out under a DNA or some other tool, especially because the population is small enough, you can still track those patients, you can still follow them. It's almost like a clinical trial, right? So I think the time line around these smaller opportunities but more devastating disorders like you see there is something that's very real. I know PTC is probably going to be the first would be best information I have. I think they're submitting their BLA here in the next 3 months, I think, is what they publicly said. And similarly, they're scheduling the European equivalent as well. And we are actively treating some patients on a one-off basis through orphan indication guidelines in different countries today. So I think it's important and it's exciting. Now when that very first one gets approved -- as I mentioned, no neuro gene therapy or stem cells have been approved yet. But when the first one gets approved, that's an incredibly important event for us because that will show that the FDA's guidelines have sort of locked in relative to these early requirements. And they could be around the delivery. They could be around clinical trial design and follow-up. A very, very important one is manufacturing and control of the drug itself. So when that first company gets approval, that means the FDA said, "Okay, this is what we're demanding from a manufacturing standpoint. And if you hit these targets, that means you can earn clearance." So we're very excited and kind of waiting with bated breath here for that first approval. I then go on to the second part, the right side of the bubble, which is a little bit farther out kind of 2024, 2025, those are some of those bigger indications that I think are incredibly exciting. Again, imagine you have Parkinson's disease, and your choice for treatment was a deep brain stimulator with the surgery I mentioned before in placing leads and putting pacemakers in the chest or in the skull compared to a single onetime injection that would put off the need for DBS for 10 or 15 years, right? Surgeons always like to escalate treatment and make it as noninvasive and reversible early on before you go to a more permanent surgery. So the concept of gene therapy or a drug agent as the starting point is certainly something, I think, that's pretty desired. So the drawback of that though is that these big markets, like Parkinson's disease, there are additional treatments, right? You can get a deep brain stimulator. You can have a pallidal surgery done. You can continue to treat it with oral drugs like levodopa even if it's -- the impact starts to wane. So I think it puts it in a situation where the FDA is absolutely going to demand incredibly rigorous studies to be completed. There's not going to be any shortcuts, and that's why some of these other ones are a little bit farther out.

Great. A plethora of opportunities there on the drug side. I guess I'm curious to try to hone in when you talk to investors, where are they most excited? Where are they ascribing value? And because you have some of these huge opportunities that are a little bit farther out, is it a little bit different of an approach that you think that investors are taking to, to valuing the company today versus if you were just in that kind of 1/2 of the opportunity that you talked about at the beginning.

Yes. I mean I think the biotech play in that portfolio play is certainly something that the vast majority of investors are following. In fact, a lot of folks that have come into the stock recently are investors in some of our biotech partners that see this as another avenue to kind of change some of the risk to that around a little bit. So I think that's absolutely present. I think the largest group also recognizes the ability of us to scale. And what that means? So to put it in perspective, our strategy is not to have 2,000 hospitals around the world all doing a couple of procedures a month. We want to have 100 hospitals, 200 hospitals around the world that are true centers of excellence, where patients travel to get these procedures done there, all right? That's the reality. That's going to be best for the patient. We want to turn each one of these hospitals into a lean manufacturing line where they have the highest quality, the lowest cost, the fastest recovery rates. And you only do that if the surgeons are getting repeated experience, if they can be something they do once a month. So the fact that, that takes place allows us to gain scale much faster than other medical device companies would as well. We don't need a massive sales organization if we're calling on these centers of excellence and patients are traveling to it. So it allows us to kind of get by with a relatively modest burn. So I think a lot of other companies that are kind of in the device space in this kind of early growth stage as well, you can routinely see $10 million, $15 million, $20 million burn each quarter, where in the first quarter of this year, we burned, I think, $2.2 million, give or take. So I think the fact that neurosurgeons generally don't adopt new technology super fast and we happen to have a business model that allows us to grow and adapt as these things come out as opposed to trying to force it through sales expansion or marketing expansion and things like that. So I think that's the other thing where they recognize -- the investors recognize this leverage across both the device and biologics platform, but the spend doesn't have to be massive to be able to get us there. I think that's another part.

Yes, that's key. That's a great point. Maybe you could talk about some of the depth that you've achieved in your accounts today just with the blocking and tackling that you're doing around the device indications and use that as a way to explain how that leverage could be realized over time?

Yes. I mean if you kind of take a step back, and it's always nice to bucket your company into different phases. We're past the development phase or past the market acceptance phase. We've done 4,500 surgeries. We've -- this is a kind of a well-oiled machine to some extent at this point. What we see ourselves doing over the last year and the next year is really building out that portfolio and adding additional procedures to that bag, like biopsy, like laser ablation. There's a few others on there, micro electric recording, as an example, aspirate -- neuro aspiration. So as our portfolio gets bigger, that allows us to do more procedures in an individual hospital, right? It's not just a DBS procedure. We could be doing DBS. We could be doing laser. We could be doing a biopsy. We can be doing drug delivery, all of these different things. So if you think about that next -- once that portfolio is complete, we get these first biologic procedures approved, our next phase of growth after that is getting 100 sites to each doing 100 cases a year, right? That puts us north of $100 million as far as the revenue run rate. And again, if you take a step back and think about it, 100 procedures is not a much -- from a hospital standpoint, they can certainly absorb that. And one of the -- some of our -- I'm going to say, detractors, but a significant barrier we've had in the past is access to an MRI scanner. If you're going to do this procedure, you need radiology to be on board and say, "Yes, we're going to give you our scanner time." So we have -- we're routinely doing 2 procedures a day and a scanner. In fact, last week was the first time we did 3 in 1 day in the same scanner. So again, if you take a step back and you say 100 cases a year, well, that could only be 1 day of MRI time each week. Again, it's not a huge ask for a hospital, especially when companies like Siemens and Philips and everyone else are making kind of lower-cost, more interoperative friendly scanners as well. So that population is going out there, too. So that's kind of how we see it. We don't have any sites today that have done 100, but again, our portfolio is incomplete, which we -- as I showed on that earlier slide, we will be completing that portfolio in the next couple of years. But we do have centers today that are doing -- take COVID out of the picture, that are on pace to be doing anywhere from 50 to 80 a year. So I think we're very close to approving 100 a year using the ClearPoint portfolio, it's certainly doable.

Got you. Yes. There are a couple of follow-ups. One, you mentioned in the newer scanners, how much is that helping in terms of these ones that are more portable, more flexible, easier to use in enabling your technology to be used more frequently?

Yes. There's a couple of things to think about. One, some of the new portable scanners, I think, are terrific. I don't know that they would always be used for neuro because, again, the delineation and the detail you need for a neuro procedure is pretty significant. But what they do, do is they take the burden to use the high-powered MRIs off of certain patients. You don't have to use MRI scanner time when some of the patients that have a leg injury or a knee injury can be analyzed in the ER, for example. So it increases the capacity and sort of opens existing MRI scanners that are out there. So I think that's something that certainly helps. The -- another really important part is when an interoperative MRI goes in, whether it's IMRIS or Siemens or Philips or GE, when those systems actually get installed, we celebrate to some extent because those systems are generally owned by the surgery department, not the radiology department. So the kind of argument inside of a hospital of radiology not wanting to give MRI time to something they can't reimburse for, it sort of solves that problem when these goes in. So any time an interoperative system goes in, while we don't need it, we can do our work in a diagnostic scanner, the scheduling is certainly something very valuable to us. So we'd like to see that happen for sure.

Got it. Got it. And on the device targets that you laid out, epilepsy, depression you talked about, we've seen more focus on these from a lot of the companies that I cover, frankly. So I'm curious to understand, as you're looking over the next few years before you get to the bigger drug targets, which of those areas do you think could provide the most growth and increased utilization for the company?

I think for the company, epilepsy could be a big one. There's a couple of ways to think about it and a couple of targets that are there. But what's nice for us is that deep brain stimulation for Parkinson's disease and essential tremor, this has been around for 25 years. So we're late to the party for that. That means everything we have to do is we have to take surgeons that are used to doing it one way and change behavior, which is always tougher. For these new indications, we can be there from the ground floor. Some surgeons that are targeting ANT for epilepsy and other pacing needs, for example, many of them because that structure is so remote and you have to thread right between the ventricles and around certain vessels and structures, they'll tell you, "Hey, I'm not -- even if I'm doing Parkinson's treatment in the operating room, I'm doing anything targeting the ANT in the MRI suite. The stakes are too high." And what's nice is that when you get those -- that thought leadership from the very beginning of a market being built all saying MRI guidance is clear, and ClearPoint is a terrific solution for it, that's a lot easier to grow with the market as opposed to trying to change behavior like we've had to do historically. But I think there's active studies in all 6 or 7 of those indications. And in some cases, it's overlapped with drug delivery, too. So we have both a device and a drug partner that can be going after the same patient population, giving us a couple of shots on goal.

Great. Well, I think we've run out of time, but thanks for sharing the ClearPoint story with us today, giving us some color and updates on how things are going, just a really unique opportunity here with the multiple shots on goal. And I hope investors enjoyed hearing more. So thanks for spending time with us and take care. We look forward to catching up with you again soon.

Sounds great, Matt. Thanks a lot.

All right. Take care.

Bye.