Pulse Biosciences is a pioneering medical technology company at the forefront of leveraging its proprietary Nanosecond Pulsed Field Ablation (nano-PFA) technology to address a diverse range of clinical indications with significant unmet needs. The company's innovative approach harnesses the power of short-duration electrical pulses to selectively ablate target cells while sparing surrounding healthy tissue, offering the potential for superior outcomes across multiple therapeutic areas.
Business Overview and History
Pulse Biosciences was incorporated in Nevada on May 19, 2014, and later reincorporated in Delaware on June 18, 2018. The company's primary focus has been on developing and commercializing its patented Nano-Pulse Stimulation (NPS) technology, a novel energy modality that delivers nanosecond-duration pulses of electrical energy to non-thermally clear or kill targeted cells.
In 2014, Pulse Biosciences made a significant move by acquiring three companies for an aggregate consideration of $5.5 million. This strategic acquisition allowed the company to obtain key intellectual property related to its NPS technology, enabling it to begin developing its proprietary CellFX System, a novel NPS delivery platform. The initial application of this technology was aimed at treating benign lesions of the skin.
As a development-stage medical technology company, Pulse Biosciences faced typical challenges in its early years. The company had to raise substantial capital through the issuance of equity securities and debt to fund its research, development, and early commercialization efforts. Additionally, navigating the complex regulatory landscape to obtain necessary approvals for marketing and selling its products presented another significant hurdle.
A major milestone was achieved in 2021 when Pulse Biosciences received 510(k) clearance from the FDA for the CellFX System for dermatologic procedures requiring ablation and resurfacing of the skin. The company also obtained CE marking approval for the CellFX System, allowing it to market the system in the European Union. Following these regulatory clearances, Pulse Biosciences began commercializing the CellFX System in dermatology for the treatment of benign skin lesions.
However, in September 2022, the company announced a strategic shift, pivoting its focus from dermatology to cardiology and the treatment of atrial fibrillation. As a result, Pulse Biosciences ceased all commercial sales and marketing operations in dermatology, redirecting its resources to concentrate on three key applications: the treatment of atrial fibrillation (AF), soft tissue ablation (with an initial focus on benign thyroid nodules), and cardiac surgical ablation. This decision was driven by the company's preclinical and early clinical data, which demonstrated the unique advantages of its technology compared to existing treatment modalities in these large and growing markets.
Financial Overview
Pulse Biosciences is currently in the development and clinical trial stages for its nano-PFA-based product candidates, and as such, has not yet generated significant revenue. For the nine months ended September 30, 2024, the company reported a GAAP net loss of $34.2 million, compared to a net loss of $30.3 million in the prior-year period. Non-GAAP net loss for the same period was $31.5 million, compared to $27.7 million in the prior-year period.
The company's cash position was significantly strengthened in the third quarter of 2024 through the completion of a rights offering, which raised $60 million in gross proceeds. As of September 30, 2024, Pulse Biosciences had $79 million in cash and cash equivalents, compared to $44.4 million as of December 31, 2023. This enhanced liquidity is expected to support the company's planned pivotal clinical trials and ongoing product development efforts.
Pulse Biosciences does not currently provide financial guidance, as it remains focused on advancing its clinical programs and regulatory pathways. However, the company has stated that it expects to initiate pivotal studies for its three key product candidates – the CellFX nsPFA Percutaneous Electrode System, the CellFX nsPFA Cardiac Clamp, and the CellFX nsPFA 360° Cardiac Catheter – in the middle of 2025.
For the most recent quarter ended September 30, 2024, Pulse Biosciences reported no revenue, a net loss of $12.68 million, operating cash flow of -$9.024 million, and free cash flow of -$9.062 million. The net loss increased by $2.11 million compared to the prior year quarter, while operating cash flow and free cash flow declined by $9.02 million and $9.06 million, respectively. These figures reflect the company's continued investment in research and development while generating no product revenues.
Research and development expenses for the three-month and nine-month periods ended September 30, 2024, were $7.70 million and $21.67 million, respectively. General and administrative expenses increased to $5.95 million and $14.32 million for the three-month and nine-month periods, respectively, primarily due to increases in stock-based compensation, employee-related expenses, and professional services.
Liquidity
As of September 30, 2024, Pulse Biosciences had $79.03 million in cash and cash equivalents, a significant increase from $44.4 million at the end of 2023. This improved liquidity position was primarily due to the successful completion of a rights offering in the third quarter of 2024, which raised $60 million in gross proceeds. The enhanced cash reserves are expected to provide the company with sufficient resources to fund its planned pivotal clinical trials and ongoing product development initiatives for at least the next twelve months.
The company's current ratio and quick ratio both stand at 11.929, indicating a strong short-term liquidity position. However, Pulse Biosciences will likely need to raise additional capital in the future to continue the development and commercialization of its NPS technology and product candidates, particularly for its cardiac applications.
Soft Tissue Ablation: Addressing Benign Thyroid Nodules
One of Pulse Biosciences' primary areas of focus is the use of its CellFX nsPFA Percutaneous Electrode System for the treatment of benign thyroid nodules. Thyroid nodules are a common condition, with an estimated 250,000 patients diagnosed each year in the United States alone. Currently, the main treatment options are either monitoring the nodules or surgical removal of the thyroid gland, which carries significant risks and side effects.
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, including thyroid nodules. The company has placed its system with seven pilot sites in the U.S., and the initial clinical experiences have been positive, with patients typically experiencing a reduction in nodule size and symptomatic relief within the first month of treatment.
Pulse Biosciences plans to work with these pioneering clinicians to develop a pivotal clinical study for the treatment of benign thyroid nodules, which it intends to initiate in mid-2025. The company believes its non-thermal nano-PFA technology can provide a patient- and physician-friendly minimally invasive alternative to the current treatment options, addressing a significant unmet need in this large and growing market.
Cardiac Ablation for Atrial Fibrillation
Atrial fibrillation (AF) is another key focus area for Pulse Biosciences, given the significant limitations of existing treatment options. The company is developing two distinct nano-PFA-based products for the treatment of AF: the CellFX nsPFA Cardiac Clamp for use in open surgical procedures, and the CellFX nsPFA 360° Cardiac Catheter for endocardial (inside the heart) ablation.
Both products are currently in early-stage clinical trials. The company's CellFX nsPFA Cardiac Clamp has received Breakthrough Device Designation from the FDA and has been enrolled in the agency's Total Product Life Cycle (TPLC) Advisory Program, which is designed to expedite patient access to innovative medical devices. Meanwhile, the CellFX nsPFA 360° Cardiac Catheter has demonstrated promising results in a first-in-human feasibility study, with investigators reporting efficient pulmonary vein isolation and quick case times.
Pulse Biosciences plans to initiate pivotal clinical trials for both its cardiac ablation products in mid-2025, with the goal of obtaining regulatory approvals to commercialize these innovative solutions for the treatment of AF, a condition that affects an estimated 43 million people worldwide.
In a significant milestone, Pulse Biosciences recently treated the first patients with AF using their nano-PFA Cardiac Surgical System in Europe. This achievement, coupled with the FDA's Breakthrough Device Designation and enrollment in the TPLC Advisory Program, underscores the potential of the company's technology in addressing the unmet needs in AF treatment.
To further support the development of its AF ablation products, Pulse Biosciences has made key additions to its team, including a Chief Medical Officer for Electrophysiology and a medical advisor. These strategic hires bring valuable expertise to guide the company's clinical development and commercialization efforts in the cardiac space.
Competitive Landscape and Risks
Pulse Biosciences operates in a highly competitive medical device industry, with established players such as Abbott Laboratories, AtriCure, Boston Scientific, Johnson & Johnson Biosense Webster, and Medtronic offering competing products for the treatment of AF and soft tissue ablation. The company's success will depend on its ability to differentiate its nano-PFA technology and demonstrate superior clinical outcomes compared to existing thermal-based ablation modalities.
Additionally, Pulse Biosciences faces the typical risks associated with medical device development, including the potential for unfavorable clinical trial results, regulatory approval challenges, and the need to effectively scale its commercial operations. The company's reliance on a single technology platform and a limited number of product candidates also represents a concentration risk.
Conclusion
Pulse Biosciences is a novel bioelectric medicine company at the forefront of developing innovative solutions to address significant unmet medical needs. The company's proprietary nano-PFA technology has shown promise in early clinical studies for the treatment of atrial fibrillation, benign thyroid nodules, and other soft tissue applications.
With a strengthened balance sheet following its recent rights offering and plans to initiate pivotal trials for its key product candidates in 2025, Pulse Biosciences is well-positioned to potentially disrupt existing treatment paradigms and improve patient outcomes in these large and growing markets. The company's recent progress, including the treatment of the first AF patients in Europe and the receipt of FDA Breakthrough Device Designation for its Cardiac Surgical System, demonstrates the potential of its technology and the growing interest from both regulatory bodies and the medical community.
However, the company faces competitive and regulatory challenges, and its success will depend on its ability to continue to demonstrate the unique advantages of its technology and effectively commercialize its products. The lack of current revenue and ongoing operating losses underscore the importance of successful clinical trials and regulatory approvals for Pulse Biosciences' future prospects.
Investors should closely monitor Pulse Biosciences' progress as it navigates the clinical and commercial development of its nano-PFA-based solutions, particularly the outcomes of its planned pivotal studies and its ability to maintain sufficient liquidity to fund its operations through to commercialization. The company's focus on high-impact medical applications, coupled with its innovative technology, positions it as a potentially disruptive force in the medical device industry, but success will ultimately depend on clinical outcomes, regulatory approvals, and effective market penetration.