Executive Summary / Key Takeaways

• Pulse Biosciences is pioneering Nanosecond Pulsed Field Ablation (nsPFA) technology, a non-thermal energy modality with demonstrated preclinical and early clinical advantages over traditional thermal and microsecond PFA methods for targeted cell ablation.
• The company has strategically pivoted from dermatology to focus on high-potential applications in soft tissue ablation (initially benign thyroid nodules) and cardiology (atrial fibrillation via surgical clamp and endocardial catheter), targeting large, underserved markets.
• Key near-term catalysts include the expected commercial launch of the nsPFA Percutaneous Electrode System for benign thyroid nodules in the second half of 2025, which is anticipated to generate initial revenue, and the planned initiation of pivotal U.S. IDE clinical trials for both cardiac devices in mid-2025.
• While early clinical data for both soft tissue and cardiac applications show promising results (e.g., significant thyroid nodule volume reduction, high rates of durable cardiac isolation), successful execution of pivotal trials and securing specific regulatory approvals (targeting PMA for cardiac) are critical to validating the technology's commercial potential against established competitors.
• The company's liquidity position, bolstered by recent financing activities including significant warrant exercises ($63.5M cumulatively by March 31, 2025), is projected to fund operations for at least the next twelve months, but future capital raises will be necessary to support ongoing clinical development and commercial scaling.

The Nanosecond Revolution: Pulse Biosciences' Bid for Disruption

Pulse Biosciences stands at the forefront of a potentially transformative shift in medical ablation, leveraging its proprietary Nanosecond Pulsed Field Ablation (nsPFA) technology. At its core, nsPFA delivers ultra-short electrical pulses, each less than a millionth of a second long, to nonthermally target and clear unwanted cells. This mechanism is fundamentally different from traditional thermal ablation methods (like radiofrequency or cryoablation) and even newer microsecond PFA technologies, which operate on longer pulse durations. The key differentiator lies in nsPFA's ability to induce regulated cell death through effects on intracellular organelles while notably sparing adjacent non-cellular structures like collagen, cartilage, and nerves. This selective targeting offers the promise of more precise ablation with reduced risk of collateral damage, a critical advantage in delicate anatomical areas.

The company's journey began with the development of the CellFX System, a versatile platform designed to deliver nsPFA energy across various applications. Initially, Pulse Biosciences pursued commercialization in dermatology for benign skin lesions, achieving FDA 510(k) clearance and CE Mark approval in 2021. However, based on compelling preclinical data demonstrating the technology's potential in larger, more impactful markets, the company underwent a strategic pivot in 2022, shifting its primary focus to cardiology (specifically atrial fibrillation) and surgical soft tissue ablation. This strategic realignment, while necessitating the cessation of dermatology commercial operations, positioned the company to pursue opportunities where nsPFA's unique properties could address significant unmet clinical needs and potentially disrupt established treatment paradigms.

Technology at the Core: Quantifiable Advantages and Strategic Roadmap

Pulse Biosciences' investment thesis is deeply rooted in the differentiated capabilities of its nsPFA technology. Unlike thermal methods that rely on heat or cold to destroy tissue, nsPFA's non-thermal mechanism aims to achieve cellular ablation without causing widespread thermal necrosis. This is particularly valuable in areas where critical non-cellular structures are in close proximity to the target tissue.

Specific performance metrics highlighted by the company underscore these potential advantages:

• In preclinical studies, the nsPFA Cardiac Clamp has consistently achieved transmural ablations (full-thickness lesions) in less than two seconds, independent of tissue type or thickness. This speed and consistency could represent a significant workflow improvement over existing methods.
• Preliminary data from the European feasibility study of the nsPFA 360 Cardiac Catheter for AF ablation demonstrated 100% acute successful electrical isolation in treated pulmonary veins and left atrial posterior walls. More importantly, three-month remapping showed durable pulmonary vein isolation in 94.2% of treated veins and left atrial posterior wall isolation in 95.5% of treated patients in a 22-patient cohort. The 360 catheter also showed promising procedural efficiency, with average left atrial dwell time of 26.2 minutes and fluoroscopy time of 6.5 minutes.
• Early results from the Italian feasibility study of the nsPFA Percutaneous Electrode System for benign thyroid nodules demonstrated an average 83% volume reduction at one year in a treated cohort and significant symptom reduction just one month post-treatment, notably without evidence of residual fibrosis or scarring often seen with thermal ablation.

These quantitative and qualitative benefits translate into a clear "so what" for investors: nsPFA has the potential to offer safer procedures (sparing nerves and acellular tissue), improved efficacy (durable, transmural lesions), and enhanced workflow efficiency (faster ablation times, streamlined procedures). These advantages could support premium pricing, drive market adoption by addressing limitations of current therapies, and create a competitive moat against both thermal and microsecond PFA technologies.

The company's R&D roadmap extends beyond its lead products, including the development of a focal catheter using nsPFA, which preclinical data suggests can create deep lesions with a streamlined workflow. This indicates a commitment to expanding the platform's utility and addressing a broader range of arrhythmias.

Financial Performance Reflecting Development Stage

As a company focused on clinical development and preparing for initial commercialization, Pulse Biosciences has not yet generated significant revenue. Total revenues were zero for the three months ended March 31, 2025, and March 31, 2024. The financial profile is characterized by substantial operating expenses driven by research and development and general and administrative costs.

Operating expenses have increased as the company advances its clinical programs and builds infrastructure. Total GAAP costs and expenses rose to $18.0 million in Q1 2025, up from $10.6 million in Q1 2024. This increase was primarily fueled by higher research and development expenses ($10.3 million in Q1 2025 vs. $6.7 million in Q1 2024) and general and administrative expenses ($7.7 million in Q1 2025 vs. $3.9 million in Q1 2024). Key drivers for these increases include higher stock-based compensation ($5.7 million in Q1 2025 vs. $1.8 million in Q1 2024), increased compensation and employee-related costs, and higher spending on paid services, external research, and supplies related to clinical trial advancement and commercialization preparation.

The company's operating cash flow reflects these expenditures. Cash used in operating activities was $13.5 million in Q1 2025, an increase from $9.8 million in Q1 2024. This trend of significant cash utilization is expected to continue and likely increase as pivotal clinical trials commence.

Liquidity and the Path to Commercialization

Maintaining sufficient liquidity is paramount for Pulse Biosciences as it navigates the costly path of clinical trials and market entry. As of March 31, 2025, the company held $119.3 million in cash and cash equivalents. This position was significantly strengthened by financing activities, particularly the 2024 Rights Offering which closed in July 2024, raising $60 million in gross proceeds. The offering also included warrants exercisable at $11 per share, providing a potential source of additional funding. The company has seen substantial exercise of these warrants, generating $14.1 million in proceeds in Q1 2025 and $47.9 million in Q4 2024, totaling $63.5 million cumulatively from warrant exercises by March 31, 2025.

Management believes its existing cash and cash equivalents are sufficient to fund projected operating requirements for at least the next twelve months from the May 8, 2025 filing date. However, the company explicitly states that additional capital will be needed in the future to fully fund its operations, particularly as it scales up commercial activities. Future funding is expected to come from public or private equity offerings, debt financings, or potential collaborations. The company's majority stockholder, Robert Duggan, has been a significant investor in past financings, including purchasing approximately 88% of the units in the 2024 Rights Offering, but his future participation is not assured.

The ability to generate revenue from the planned commercial launch of the percutaneous electrode in the second half of 2025 is a critical step towards offsetting cash burn, but it is unlikely to fully eliminate the need for external financing in the near term.

Strategic Initiatives and Outlook

Pulse Biosciences' strategic focus for 2025 is clear: advance its lead products towards commercialization and pivotal clinical validation.

1. Soft Tissue Ablation (Benign Thyroid Nodules): Following FDA 510(k) clearance for its Percutaneous Electrode System in March 2024 (and a second needle size in August 2024), the company is conducting a pilot program across 8 U.S. sites, with over 90 patient procedures completed. The goal is to refine protocols and generate data to support a broader commercial rollout. Management expects initial pilot users to convert to commercial use in the second half of 2025, leading to the materialization of revenue during this period. A pivotal clinical trial is planned to commence in mid-2025 to support a specific FDA indication for benign thyroid nodules, aiming to position nsPFA as a preferred, gland-preserving alternative to surgery in a market estimated to affect millions globally.
2. Cardiac Surgical Ablation (AF Clamp): The European feasibility study is ongoing, with over 30 patients treated and expansion approved to enroll up to 60. Encouraging acute data is expected to be shared in late 2025. In the U.S., the device received FDA Breakthrough Device Designation and was enrolled in the TAP program, facilitating increased engagement with the agency. The company plans to pursue a PMA pathway for a specific AF indication and expects to begin a pivotal clinical trial in mid-2025.
3. Endocardial Catheter Ablation (AF 360 Catheter): The European feasibility study is progressing well, with over 100 patients treated across multiple sites. Promising acute and remapping data have been presented, highlighting the 360 catheter's potential for efficient, durable pulmonary vein and posterior wall isolation. A U.S. IDE pivotal clinical study is expected to commence in mid-2025, also targeting a PMA submission.

The company is implementing a hybrid business model, planning a direct commercial team for the less competitive benign thyroid nodule market and open to partnerships for the more complex cardiology space. This approach aims for capital efficiency while maximizing market access.

Competitive Landscape and Positioning

Pulse Biosciences operates in highly competitive medical device markets dominated by large, well-established players with significant financial, technical, manufacturing, and distribution resources. In cardiology, key competitors include Abbott Laboratories (ABT), AtriCure, Inc. (ATRC), Boston Scientific Corporation (BSX), Johnson & Johnson (JNJ) Biosense Webster, and Medtronic plc (MDT). These companies offer a range of ablation technologies, including thermal methods and increasingly, microsecond PFA devices.

Compared to these incumbents, Pulse Biosciences is a significantly smaller, earlier-stage company with minimal revenue and negative profitability, contrasting sharply with the substantial revenue, positive margins (e.g., BSX gross margin 69%, MDT operating margin 18%, ABT net margin 32%), and strong cash flow generation of larger rivals like BSX, MDT, and ABT. Even AtriCure, a more specialized player, currently has higher revenue and growth than Pulse, although it also operates at a loss.

Pulse's competitive strategy hinges on its differentiated nsPFA technology. It aims to compete not on scale or breadth of portfolio (where it lags significantly), but on the potential for superior clinical outcomes and procedural advantages offered by nsPFA. For instance, the ability to spare nerves and acellular tissue could be a key differentiator against thermal methods, while potential for deeper, more consistent lesions and streamlined workflow could provide an edge over some microsecond PFA devices.

In the benign thyroid nodule market, the competitive landscape appears less entrenched, with existing thermal alternatives facing limitations due to safety concerns near critical structures. This presents a potential opportunity for Pulse's non-thermal approach to gain traction with less direct resistance from dominant players.

However, the challenge remains substantial. Larger competitors can leverage their scale, existing customer relationships, and financial power to invest heavily in R&D, acquire competing technologies, and influence market dynamics, including reimbursement. Pulse's ability to translate its technological advantages into commercial success will depend on generating compelling clinical evidence, securing favorable regulatory approvals and reimbursement, and effectively executing its commercial strategy, whether directly or through partnerships.

Risks and Challenges

Investing in Pulse Biosciences involves significant risks, typical of a development-stage medical technology company.

• Need for Additional Capital: Despite recent financing, the company will require substantial additional funding to complete clinical trials, scale manufacturing, and build commercial infrastructure. Inability to raise funds on acceptable terms could force delays or curtailment of operations.
• Clinical Trial Success: The outcomes of ongoing and planned pivotal clinical trials are uncertain. Failure to demonstrate safety and effectiveness to regulatory bodies' satisfaction would severely impact commercialization prospects.
• Regulatory Approvals: Obtaining specific FDA approvals (especially PMA for cardiac devices) is a lengthy, complex, and uncertain process. Delays or denials would significantly impact timelines and market access.
• Market Adoption and Reimbursement: Even with regulatory approval, market acceptance by physicians and adequate reimbursement from payers are not guaranteed, particularly for a novel technology from a smaller company.
• Competition: Intense competition from larger, well-resourced companies with established products and distribution channels poses a significant threat.
• Technology Validation: While promising, the long-term clinical performance and mechanism of action of nsPFA are still being fully elucidated, which could impact regulatory and market acceptance.
• Key Personnel and Management: The company's success depends on retaining key executives and scientific personnel and attracting skilled sales and clinical staff.
• Concentration of Ownership: The significant ownership stake held by Mr. Duggan influences corporate governance and strategic decisions.

Conclusion

Pulse Biosciences represents a high-potential, high-risk investment opportunity centered on the disruptive promise of its Nanosecond Pulsed Field Ablation technology. The strategic pivot to focus on large markets like soft tissue ablation and atrial fibrillation positions the company to address significant unmet needs with a differentiated non-thermal approach that appears to offer compelling preclinical and early clinical advantages over existing therapies.

The outlook for 2025 is marked by critical milestones: the anticipated initial revenue generation from the commercial launch of the percutaneous electrode for benign thyroid nodules in the second half of the year and the planned initiation of pivotal U.S. clinical trials for both cardiac devices in mid-2025. Successful execution on these fronts is paramount to validating the technology's potential, securing necessary regulatory approvals, and demonstrating the ability to compete effectively against larger, established players in the medical device landscape. While the company's current liquidity provides a runway for the near term, the need for future capital remains a key consideration for investors evaluating Pulse Biosciences' long-term growth trajectory.