Business Overview

Pulse Biosciences, Inc. (NASDAQ:PLSE) is a novel bioelectric medicine company committed to health innovation using its patented Nano-pulse Stimulation ("NPS") technology. The company's proprietary CellFX System, which delivers nanosecond-duration pulses of electrical energy, has the potential to revolutionize the treatment of atrial fibrillation (AF) and a variety of soft tissue conditions.

Pulse Biosciences has developed its CellFX System, a novel Nanosecond Pulsed-Field Ablation (nsPFA) delivery platform, and has commercialized the initial application of its nsPFA technology to treat benign lesions of the skin. In parallel, the company has designed a variety of applicators, or end-effectors, to explore the potential use of the CellFX platform to treat disorders in other medical specialties, such as cardiology, gastroenterology, gynecology, and ear, nose and throat.

The company's cardiac program is a key focus, as it believes nsPFA technology is uniquely suited to perform an integral role in the treatment of AF, a highly prevalent heart condition. Pulse Biosciences has developed a cardiac ablation clamp for use in cardiac surgery and a cardiac ablation catheter for use in electrophysiology. In December 2023, the company initiated a clinical study in Prague, Czech Republic, to test its CellFX nsPFA 360° Cardiac Catheter in patients with AF, and early data from this study have been promising. The company has also taken steps to initiate a clinical study of its CellFX nsPFA Cardiac Clamp in the Netherlands and, in January 2024, filed a premarket notification 510(k) with the U.S. Food and Drug Administration (FDA) for clearance to commercialize this novel device.

In March 2024, Pulse Biosciences received FDA 510(k) clearance for its CellFX nsPFA Percutaneous Electrode System for use in the ablation of soft tissue in percutaneous and intraoperative surgical procedures. The company has engaged with experts in the field of soft tissue ablation and is in the process of securing approvals to install its CellFX System and initiate patient treatments at multiple hospitals and clinics in the United States.

Financials

Pulse Biosciences has not yet generated significant revenue, reporting $0 in annual revenue in 2023. The company has incurred substantial operating losses, reporting an annual net loss of $42.21 million in 2023. Its annual operating cash flow was -$33.04 million, and its annual free cash flow was -$33.16 million.

In the first quarter of 2024, the company reported a net loss of $10.1 million, compared to a net loss of $9.8 million in the same period of the prior year. Total costs and expenses increased by $1.0 million to $10.6 million, primarily driven by an increase in non-cash stock-based compensation expense. Cash and cash equivalents totaled $34.9 million as of March 31, 2024, down from $44.4 million as of December 31, 2023.

Liquidity

To finance its operations, Pulse Biosciences has relied on the issuance of equity securities and debt. In June 2022, the company completed a rights offering that raised $15 million in gross proceeds. In September 2022, the company entered into a $65 million loan agreement with its majority shareholder, Robert W. Duggan, which was subsequently terminated in April 2023 when Mr. Duggan purchased $65.2 million in shares of the company's common stock.

Looking ahead, Pulse Biosciences has announced plans to initiate a rights offering of up to $60 million worth of units, consisting of common stock and warrants, to its existing stockholders. The company believes this rights offering, if fully subscribed, would fund its growth plans into the first quarter of 2026. The company is also exploring other potential financing options, including public or private equity offerings and collaborations, to support the continued development and commercialization of its NPS-based technologies.

Regulatory Milestones and Clinical Progress

Pulse Biosciences has made significant regulatory and clinical progress with its NPS-based technologies. In March 2024, the company received FDA 510(k) clearance for its CellFX nsPFA Percutaneous Electrode System for use in the ablation of soft tissue. This clearance allows the company to market and sell the device in the United States for a variety of soft tissue ablation procedures, including those involving the thyroid, liver, breast, and other areas of the body.

The company has also made advancements in its cardiac program. In December 2023, Pulse Biosciences initiated a clinical study in Prague, Czech Republic, to test its CellFX nsPFA 360° Cardiac Catheter in patients with AF. The study has enrolled 24 of the planned 30 patients, and early acute data and remapping data have been promising. Additionally, the company has submitted an application to the Ethics Committee in the Netherlands to initiate a first-in-human feasibility study with its CellFX nsPFA Cardiac Clamp, which is designed for use by cardiac surgeons during the surgical treatment of AF.

Competitive Landscape and Growth Opportunities

The medical device industry is highly competitive, and Pulse Biosciences faces competition from large, well-established manufacturers of medical technologies, devices, and similar products. In the cardiac ablation market, the company competes with the likes of Abbott Laboratories, AtriCure, Inc., Boston Scientific Corporation, Johnson & Johnson (Biosense Webster), and Medtronic plc, among others.

However, Pulse Biosciences believes its nsPFA technology, with its unique ability to non-thermally clear targeted cells while sparing adjacent noncellular tissue, can provide significant advantages over existing thermal ablation modalities. The company's cardiac ablation clamp and cardiac ablation catheter both utilize the CellFX System to generate its proprietary pulses of electrical energy, which it believes can enable faster treatment times, improved safety profiles, and better outcomes for patients.

In the soft tissue ablation market, the company's CellFX nsPFA Percutaneous Electrode System has the potential to address a wide range of procedures performed by otolaryngologists, endocrine surgeons, and interventional radiologists. The company is actively engaging with key opinion leaders and securing approvals to install its CellFX System at leading medical institutions to drive adoption of this novel technology.

Risks and Challenges

As a development-stage company, Pulse Biosciences faces several risks and challenges. The company's future success is heavily dependent on the successful development and commercialization of its NPS-based technologies, including its CellFX System and related product candidates. Any delays or failures in the regulatory approval process, clinical trials, or market acceptance of the company's products could have a material adverse impact on its financial condition and prospects.

Additionally, Pulse Biosciences operates in a highly competitive industry and may face challenges in maintaining its technological edge, securing adequate funding, and attracting and retaining key personnel. The company's reliance on third-party manufacturers and suppliers also exposes it to potential supply chain disruptions and quality control issues.

Outlook

Pulse Biosciences is at a pivotal stage in its development, with several key regulatory and clinical milestones on the horizon. The company's nsPFA technology has the potential to revolutionize the treatment of AF and a variety of soft tissue conditions, offering significant advantages over existing ablation modalities.

The successful commercialization of the company's CellFX nsPFA Percutaneous Electrode System and the continued progress of its cardiac programs will be critical to Pulse Biosciences' future growth and profitability. With the recently announced rights offering and the potential to raise additional capital through other financing avenues, the company appears well-positioned to execute on its strategic initiatives and deliver value to shareholders.

Conclusion

As Pulse Biosciences continues to navigate the regulatory landscape and advance its clinical studies, investors should closely monitor the company's progress and the market's reception of its innovative NPS-based technologies. The company's ability to successfully commercialize its products and establish a strong competitive position in its target markets will be key to its long-term success.