Pulse Biosciences, Inc. ($PLSE)

We'll go ahead and get started with our next presentation. Very pleased to have management team from Pulse Biosciences, Paul LaViolette, President, CEO and Chairman here today to talk about the business. I make this offer in every session. This is interactive. Happy to take questions from people in the audience. If you do have a question, just wave me and we'll get you a mic. So it's available to those participating via webcast.

Maybe we just kind of start higher level. You've been at Pulse maybe 1.5 years or so. And give us a little bit of background, like what attracted you to the role? What did you see in the company? And how does this compare to kind of the bevy of other opportunities that you've seen across the?

Yes. Well, thank you, David. It's great to be here. I think it compares really favorably to use your phrase to the bevy of opportunities. If I think about what attracted me -- it's not surprising, right, with what's going on in the field of PFA in the last couple of years that PFA by definition, draws interest. But there are a lot of PFA companies. PFA is actually a relatively standard technology today. What drew me to this was the uniqueness of the form of energy, and we can talk about it in more detail, but it is a nanosecond. It's a highly differentiated form of PFA. PFA has the potential to treat so many maladies because of its unique nonthermal ablation form. And I saw in this company a fantastic team, great backers, tremendous innovation, 250 patents, the potential to own a new form of therapeutic energy that not only could be widely applied to multiple diseases, but in particular, it could be highly concentrated on some of the most important markets in med tech, most notably atrial fibrillation. So this was a unique lineup that aligned a technology that could be alone, not only best and first-in-class but alone in class in one of the most important med tech markets.

I think there's a lot of attention that gets drawn to the company on the AF opportunity. But it also sounds like you're describing this as a platform technology. Maybe help us think about just kind of the identity of the company and ultimately, longer term, what you're trying to build?

Yes, it's a great point. And platform companies are hard sometimes to understand to comprehend. So this is a platform technology. It started off a handful of years ago with its first and has had subsequent, I think, half a dozen FDA clearances and can be widely used. I'm really attracted to that. I -- frankly, in my 45-year history in med tech, I've worked in cardiovascular. I've worked in a lot of general surgery and endosurgery applications. There are benign and malignant applications here. So it's a portfolio approach in how we can define diseases. But we also really wanted to be focused on what was most important. And so over the last couple of years, we have advanced a number of programs. We have 2 others in either the market or in the clinic. But we focused in the last year based on, I would say, this positive data on AFib. And so we've really concentrated our resources now, and we'll spend more time, I'm sure, on the EP opportunity while continuing to advance other applications. And I do like to say, especially when I'm speaking to electrophysiologist, -- the data, as an example, that we're generating in the thyroid application is as impressive in that market as EP. But the combination of EP differentiated clinical outcomes, market size, market growth and early adoption of PFA, that combination is too compelling to not make it our principal focus.

And I obviously want to spend the majority of our time on EP here, but maybe just one more strategy question because the platform company, it resonates in that you can obviously have multiple growth vectors associated with it. But each of those different platforms does require different R&D, different go-to-market, specialized sales force. So how do you think about just longer-term resource allocation as you build out a multi-therapeutic platform company?

Well, we address the resource allocation by making the decision to focus on AFib, but not to leave the others entirely behind. And so we start with a single energy, right, which gives us a lot of concentration of resources. We have a single console that -- but for minor modifications in software can really be used across the board. Then it becomes an application-specific strategy. Do you want to generate a clinical study and an application in one area or another. We also have defined ourselves as having a partnership strategy. We have capability of going in select markets that are, let's say, more addressable with direct resources. But in any of the larger markets, and EP is a great example, very large, very competitive, we'll approach that market with a partnering strategy, which allows us from a capital and resource management perspective as well as investors from the perspective of, well, how much capital would this company consume. We're not planning to build stand-alone businesses in every market. And we'll use capital-efficient ways to bring this technology as rapidly as possible to patients where we can approach a market that will have the greatest business and clinical impact.

Well, it's a good segue to jump into the EP opportunity. Maybe we could start just with the technology specifically. You brought it up in kind of your intro around the NanoPulse energy source. And I think we talk about PFA or irreversible electroporation or however you want to define it, it is the next in a wave of energy sources that have been applied to EP. So maybe help us understand the NanoPulse technology and how it fits in the landscape of just that broader EP evolution from RF to cryo to the non...

Yes. So PFA, of course, is the manifestation, pulse field ablation of delivering pulse electric fields. So we're all delivering pulse electric fields for the purpose of treating tissue, not by destroying it with excess heat or excess temperature, hot or cold, but by obviously introducing IRE electroporation, causing cells to break down with membrane permeability. We do that very differently than all other PFA energies. And I think it's really important to understand that we're joining a group of technologies that has the potential to deliver nonthermal tissue therapy, but really with a different combination. People talk about algorithms that we're going to change this or change that. We're changing really the form of energy and the mechanism of action that we introduce. Nanosecond PFA shortens the pulse duration from millions of a second to billions. They're both short, but bear in mind, that's a 1,000-fold difference, right, on the time continuum. And then in order to make up for that extreme brevity of energy delivery, we dose with a much higher amplitude of energy measured in amplitude of bolts. That combination creates a different and much more efficient way of treating cells. It also creates a different set of technology requirements around which we have innovated, which creates a richness of patent and innovation protection that we think allows us to be considered really the only likely competitor or deliverer of nanosecond PFA.

Look, I think this is a super important conversation because as you look at the evolution of treating AFib by endovascular solutions, like you have an RF and we have contact force RF, and it was all about going deep, getting deep durable lesions. And then we had cryo, which kind of opened up the paroxysmal market and got to the younger patient population. But even with then a PFA, which is basically like kind of taking a Bazuka the left [ treatment ], delivering a lot of energy in a way that's nonthermal, so it's safe. And stunning the tissue. But all of this has led us to what's been deemed acceptable efficacy rates have been like still in the 70s Foristal patients and still in like the 50s and 60s for persistent patients. So maybe help us think about some of the sort of the disease treatment differences between NanoPulse and some of the other technologies and how you can address this still seeming shortcoming from an efficacy standpoint.

I think it's a great question, and it really highlights the state of the market, right, which is -- it is safer. We've expanded the patient population that we can treat. And of course, that's driving double-digit, even 20% organic growth in procedures. That's fantastic. This is the #1 arrhythmia. There's a lot of patients to be treated. We have so many patients who are struggling with throughput, even as procedures have gone from 2.5 hours to 2 to 1 to maybe just shy of 1 hour, we can't treat patients fast enough. So can we find an energy that can treat patients with less time, more energy efficiency, not compromising safety at all, maybe improving upon it and improving efficacy because to your point, that continuum of energy evolution from RF to cryo to first-generation PFA, all of those results are basically locked in that upper 70%. And so if you look at the feasibility data that we've published, 96% efficacy as it relates to AFib freedom at 12 months, 90% at 12 months freedom from flutter, fibrillation or tachycardia. How does that 90% compare? Well, Sphere-9 is doing really well in the market. Sphere 9 registered around 78%. [ VARIPULSE ], a big new story, 78%; FARAPULSE, the biggest story in the last 4 years, 74%. How do you go from 74% to 90%, which is -- if you look at it from 100% down, it's like we're reducing failure by 2/3. That's never been done by a single form of energy iteration in the past -- in the history of electrophysiology. So I think that puts in perspective what we think we have here.

And as you think about -- maybe jump into the clinical data a little bit further. You have the initial data. Maybe talk us through the U.S. IDE strategy and how to think about just timing and key regulatory milestones.

Well, let me correct the -- we have initial data, and I think that's fair. But we also have a tremendous volume of initial data. And if you think about most companies do a feasibility study, they might treat 20 or 25 patients and then they think, okay, now we know generally what we have. We have treated over 175 patients, and we have about half of those patients followed out a year now. So we have as much feasibility data as companies will generally produce in their pivotal study. So we feel really good about that. Then we go to the pivotal study and say, what are we trying to prove there? In many ways, we're really just trying to replicate the compelling nature of the feasibility data that we've already generated. So it's a relatively conventional pivotal study, single-arm, paroxysmal focus as the first sort of foray to enter that market, relatively modest scale, around 150 patients followed roughly a year and showing against an objective performance criteria ablation success. And so that's what we're doing. We received approval at the very end of '25, started enrolling in April and are off to a very good start. As we've mentioned publicly, we did our first cases the first week of April. And importantly, that first anecdotal moment, right, that first lab, a first time a team is touching this catheter for ever and on their very first day performed 7 cases, that's unprecedented.

And maybe just if we kind of fast forward, you kind of think about it, I don't know, 6 months to enroll, a year of follow-up, get the filing together, a year to approval, that would put you at 28.

Yes, early '28. So I look at it in 3 tranches of time and effort, enrollment, follow-up and then obviously, review time. Enrollment, we started off by saying we'll finish enrollment by the end of '26. We subsequently updated our enrollment schedule and said, we're ahead of schedule. We're going to move that now to October on a beat and raise kind of mindset. And of course, we're working as a team to try to beat and raise again. We haven't determined any changes subsequent to early October, but we're working hard to try to do that. So that's enrollment. Then you have follow-up. We're using a Bayesian analysis with a blended endpoint following some patients 12 months with the remaining patients 6. So we don't have -- we -- in our statistical plan, we do not need to follow the last patient in for 12 months. And we'll provide more detail on that over time. And then, of course, FDA review time is a function of -- they have a statutory 180-day to review that. But give them clean data, give them outstanding safety and review times can be compressed. And I think if we optimize our execution of those 3 tranches of time, we'll get very close to the end of 2027.

And there's -- and I think there's been some discussion -- this came up at HRS, conversations with the FDA around shortening the length of follow-up needed to get approval for an AF indication. I think there's been discussion about being 6 months data, 12 main and perhaps that's what you're reflecting in your statistical plan. Any update you can provide on that?

Well, only that, that is -- we agree with that, number one. Number two, it's based upon a lot of data, a lot of studies that are deriving from the efficacy. If PFA addresses cells and those cells are turned off, then what are you going to see from month 4 to month 7 to month 9? And at some point, there is diminishing value in following longer term, and you can use the power of some patients followed a year to inform how other patients followed for a shorter period of time will do over a year. That's what the statistical plan calls for, and that's how you can blend and optimize aggregate follow-up time with a combination of 6 and 12.

And between now and that launch time, maybe talk to us about Obviously, the things happening on the clinical and regulatory side, but talk about the other piece of it. What are the things you're doing over the next kind of 18 months to get launch ready? Is it upstream marketing, supply chain, starting to think about who are going to be your key sites. Maybe help us think about all the kind of priming the pump activities that you're going to be doing ahead of that approval.

Well, the first thing you think about is what is our go-to-market strategy, and we've defined that as a partner strategy in EP. So some of the elements that you described, we would not be doing entirely on our own. Preparing for launch, you mentioned supply chain. And yes, that's not something that you can turn on overnight. I will say our catheter and our team has done a magnificent job engineering from a not only a design perspective, but a design for manufacturability perspective. So we feel very good about our margin profile, and we feel very good about the scalability of this technology. We've already commenced manufacturing, and we're sourcing today for our clinical work devices from 2 contract manufacturers. So we don't have to build a plant ourselves. This is the kind of thing the medical device industry is extremely well suited to do for us. We do make the capital equipment ourselves. We have -- we will have no problem scaling to supply a significant launch in year 1 and year 2. And you think about that as 2028, 2029, that's a fair amount of time to scale up. When I think about segmentation, -- this is -- I don't want to dismiss the question, but this is a catheter built for every set of hands and for every left atrium. And by that, I mean, extremely low learning curve, follow the workflow of other catheters, much easier device to manipulate in the left atrium. We put this in the hands of physicians and time after time after time on their first case. And I will say anecdotally, we opened a site yesterday in the United States, very experienced, very prominent KOL using our catheter for the first time. He's probably tried every catheter on earth, and he turns to our team and says, this is amazing. That's the kind of feedback that we get. And that parlays into 5 to 10-minute ablation times. So how is that segmented? Well, it's for all paroxysmal patients. That's the #1 patient indication flowing through the EP lab. High-volume labs want it because it dramatically improves their throughput. Medium-volume labs want it because it reduces the variability of operator performance. It's really suited for every procedure. Now in the United States, we're obviously focused on paroxysmal as our first indication. We'll advance a persistent study later this year. But we treated a number of patients with both PVI and posterior wall ablation in our European study, and we have data on that. The data are outstanding. And so if you think about going to market, being able to treat pulmonary veins, being able to treat the posterior wall, that's 95% of the EP population.

And one of the things that really caught my attention when I was spending time in EP labs is how much stuff is used in an EP case. You have the mapping system, you have access catheters, you have diagnostic catheters, CS catheters. This is an incredible amount of ancillary products that surround the procedure. Can you maybe just talk about how you're thinking about compatibility and integration with some of the electromechanical products on the mapping side, but then also just some of the mechanical products.

So it's a great setup. The lab is complicated and the procedure has a lot of stuff. But the market has voted and it basically has said, only one thing really matters to us, the right ablation tool. And with that, everything else can follow. If I go into a complex lab now, they've got multiple mapping systems. They can use the ancillary tools. So they're really thinking about how does this ablation catheter change my procedure setup. And I think we're redefining how that will happen. And so mapping integration, we are currently -- we can be mapped and if you read our IDE, it says you can be mapped with any commercially available mapping system, which means really the barrier to entry is not around mapping. It's around, are you interested in a device that will likely deliver more efficient energy, higher ablation results and much improved workflow. When I think about data, we have great data. We talked about that. The thing that's most compelling to our physicians, though, is the ease with which they can put this catheter into the left atrium move from one vein to another, deliver only ablation at the ostial, one at the antral, 8 lesions, each lasting only 5 seconds, taking only 5 to 10 seconds to move from one to the other. We've had our best ablation time to date be 3 minutes of ablation time. And our average again, with very low operator-to-operator hands-on experience in terms of how many cases they've done, 5 to 8 minutes. So when you think about what's going to drive the system change, what's going to drive selection, it's not about what transseptal device you use. It's not -- you're talking here about single-catheter workflow where you can map and ablate with one device that can do in and outside the vein ablations. And each of those ablations taking 5 seconds, you can do a variety of ablation protocols, if you will, all within a limited number of minutes, do a post-ablation map with this device and get out. that opens up a realm of throughput efficiency of easing the pressure in the AFib market of moving to alternative sites of care that no other device holds the potential to deliver.

It would seem like you kind of made a reference to it there, but we're seeing this like proliferation or potential proliferation of AFib procedures in the ASC. This would seem like an optimal technology to be used in that setting. So maybe talk to how you think that both unlocks kind of market growth, but also how it helps sort of validate your product market fit.

I think this is an unlock. I think -- and it does validate the fit. I think the -- if you think about the ASC trend, however, it's really just beginning subsequent to legislative changes that went into effect at the beginning of 2026. So this is a trend that is only commencing. If you were to look today and say, well, what percentage of all AFib ablations are done at ASCs, it's a low single-digit percent. But it's much more about how it will play a role in the next couple of years, both for efficiency, but also just to provide capacity in the marketplace. And I'll pivot off of your comment earlier about the complexity of the cath lab. How can we deconstruct that complexity and put it into a lower intensity site of care that allows for incremental procedure flow in AFib therapy. That's really the goal. So you have to have a couple of things that enable that. Number one, you have to have an ablation procedure that's driven mostly by anatomical decision-making, go in the veins, ablate those. We know where they are. then ablate the posterior wall, if that's your next step. Those are mapped -- they have to be mapped, but they're not mapping intense, which allows you to reduce your mapping intensity at the ASC. You want to treat a patient with a low anesthesia burden because you don't want to have GA on site. You can't use GA if you have to paralyze the patient. You have to paralyze the patient if you have low or slow, I should say, pulse durations because that stimulates a lot of involuntary muscular movement. And so you have to have a technology that can be used with sedation protocol that is mapping-light that can allow for super high efficiency and patient throughput. And I think I just described our device.

It's very helpful. And I totally agree with you on the selection criteria leading with the ablation catheter. And I had this experience on the other side that no one buys a car for like the handle on the glove compartment, right? You buy a car for a lot of other reasons and you sort of assume the other stuff works. And I think EP is very similar that you buy -- you engage with the company because of the ablation catheter and the efficacy.

I think that's similar...

Efficient.

But that's only recent. I think you should bear in mind that, that trend inverted with the arrival of FARAPULSE as the first-generation PFA device. Prior to that, it was mapping led and followed by ablation.

And as you think about the commercial strategy, I mean, I think one of the challenges even with the ablation catheter being your core technology, this is still becoming a contract-heavy sale? I can imagine the larger companies that have more sort of broad portfolios or trying to leverage that as the market becomes more competitive. So maybe just give us a window into like what the partnership strategy looks like, like how you envision that coming to life and what you're looking for in a partner?

Well, our partnership strategy is driven by our performance, our execution. So we're very focused on ourselves, come up with that best product market fit, drive execution effectiveness, put up data that no one's ever produced. We've done that in Europe. And now as we go from center to center to center in the United States and every single physician that touches our catheter is one of the KOLs in the market, and every one of them has the exact same experience and response. That -- okay, you want a partnership strategy, that's it because the partner prospects can then not deny -- let's look at what drives market cap. How about growth in EP? What drives growth in EP, having every physician desperate to use your catheter and having that catheter solve the difficult problems of this marketplace today, including throughput, including enabling more and more -- not all electrophysiologists perform AF as an example. How do we democratize this? So we are focused on delivering that value proposition. Then you step back and say, what are partners experiencing today? Partners are experiencing the volatility of their own short-lived product life cycle. They launch a product, they get leaped over by another minor iteration, they lose market share. And unfortunately, a 5-point market share change in AFib translates to a $25 billion loss in market cap, right? And so if you think about what would be the #1 most desirable drop-in for a partner, it would be a next-generation technology that was deeply patent-protected for which competitors would not be likely to arrive on the scene for a very long rich innovation at its base so that even if someone aspired to copy it, it would take them 10 years to get there and that added extraordinary ease of use to the lab and brought along the prospect for superior outcomes, which, by the way, unlocks something else, which is a diminution in the use of drugs as first-line therapy and an acceleration of the use of highly safe and highly workflow-efficient ablation as frontline therapy for AFib. That, to me, is what is the underpinning of the partnership strategy. And partnership can have a pretty wide spectrum too. You can have everything from an exclusive distribution relationship to a revenue-sharing model to a shared sales force all the way to an acquisition. So just help us think about how you're prioritizing your time and kind of establishing the right partnership such that when you do get FDA approval, you're ready to bring this product to market.

So we're really focused on doing our job and not surprisingly, in the process of doing our job and doing it well, partner interest is organic after that. So we don't have to work on partnership in the sense of a conventional company hires a BD Vice President to go establish partnership interest. It's not that way. And it's in large part because of the intensity of focus on AFib. So partnership dynamics are natural partnership discussions are taking place. And I think it's the drive from where are we now? And I'd like to remind folks, we only disclosed our efficacy data for the first time in February. And here we are... [Audio Gap]

In some ways, burst on the scenes. And that entire partnership population is really coming to understand us quite well and has been doing that now only over the last couple of months. And you work that forward, say, okay, additional de-risking additional data coming to fully grasp the disruptive power of nsPFA. And then -- then you go forward to the timeline we talked about. What are you going to do? You're going to launch around the end of '27, early '28, work backward from that, how much time do we have to prepare supply chain, integration, all those things say, okay, well, somewhere between you advancing your story and us contemplating how this might work with us in a partnership, we begin to converge upon a timeline that is between now and the next number of quarters for something like that to materialize.

And appreciating that partnership announcement, timing them is unpredictable. What are the other kind of milestones that you'll be able to update investors on over the next, call it, 6 to 12 months? Are you going to provide quarterly enrollment updates? Are we going to see other...

We won't provide quarterly enrollment updates because we won't be going quarter-to-quarter and still enrolling. So we will provide -- think about the flow of information. So number one, we have this large open-label patient population that we've treated in Europe that will continue to produce data for us essentially on a real-time basis. So that's a wonderful asset, again, of size equal to or greater than the IDE. So while you wait for a binary opening of the envelope in the IDE, the feasibility study marches on and becomes richer and richer in what it teaches us. And the more and more data you have followed longer and longer time becomes so consistent and concordant. -- it makes it almost inconceivable that then a U.S. population following a similar patient group would not reflect the same outcome, right? So that's job #1. Job #2, IDE enrollment. We announced last month that we would shorten the timeline. We'll continue to drive that, and we'll provide routine updates on that. From that point, once you get to a certain percentage enrolled, then you lock the last patient in for the 12-month follow-up that kind of puts a pin in the calendar. We'll certainly announce that. And -- but then you go only weeks after that before significant enrollment milestone completion. We've already commenced modular submission. So this thing is moving, and it's moving fast, and I think our team is doing a great job executing.

And do you think we can see the U.S. IDE study readout at HRS next year or that the right time?

I don't -- well, we haven't announced anything like that. I'd have to think that through, but that sounds tight. That sounds tight just based on the composite follow-up timelines for the first half and second half of our enrollment.

Okay. Excellent. Well, I know we're just about at time here, but maybe I'll turn it back to you to make any closing remarks. I mean you've obviously -- it's been a really dynamic first half of the year. You had AF Symposium, you had HRS -- you've been, I think, out meeting with investors. Maybe give people a feel for how you want them to walk out of this conference and presentation and as they kind of go reflect on the story from here.

Well, first of all, I'm excited about the story. I hope some of that excitement has come through. I've been in med tech for 45 years. I've been associated with some really big devices and markets. I've never been associated with anything as compelling as nsPFA, number one. Number two, the experience in the cath lab is wholly different with our technology. And yes, that's going to convert into definitively measured clinical outcomes. But the top physicians, when they're going into a procedure, they're not thinking about what was the readout for this study or that study. They're thinking, okay, I know this catheter works and I know it works incredibly well in my hands. And what -- actually, the way physicians articulated to us is why would I use anything else? And then the last thing I would say, just from a mechanical perspective as a company financing, we opened up a financing strategy. We've talked about this. We have an ATM that's open and active now. We have a shelf registration and then we have the prospect of capital raise from a strategic partnership. So we're well financed to execute our plan today. We're adding capital over time. And I will tell you, this is an exciting story in the most hot and tightly followed market. And I think we're going to be extremely disruptive, not only to the treatment of AFib, but to a number of diseases thereafter.

Well, I think that's a great place to wrap up here. Paul, I want to thank you. Thank you. It's always a privilege to sit down with you. You have had an incredible impact on the medical device industry and really shape a lot of the companies that we know and follow today and looking forward to see the direction of Pulse play out.

Thank you very much.

Thank you.