On March 31, 2022 Pulse Biosciences, Inc. (Nasdaq: PLSE), a novel bioelectric medicine company commercializing the CellFX System powered by Nano-Pulse Stimulation (NPS) technology, reported financial results for the fourth quarter and full year of 2021 (Press release, Pulse Biosciences, MAR 31, 2022, View Source [SID1234611292]).

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Company Updates

Implemented changes to commercial leadership, salesforce and strategy, to focus on increasing commercial clinic utilization and over near-term reducing emphasis on new system sales.

Appointed two medical technology industry veterans to commercial leadership positions; Kevin Danahy to the newly created role of Chief Commercial Officer and Joe Talarico as Vice-President of North American Sales.

Initiated operating expense reduction programs, including workforce reductions, expected to lower costs by approximately 20% from the current run rate, resulting in expected 2022 operating expenses in line with 2021.

Achieved fourth quarter 2021 revenue of $844 thousand and full year 2021 revenue of $1.4 million.

Completed the first three commercial sales of CellFX Systems, two in the fourth quarter of 2021 and one in the first quarter of 2022.

Transitioned 17 Controlled Launch Program participants to commercial use in the fourth quarter and expect an additional 10 participants to transition in the first quarter, resulting in 39 total commercial conversions at the end of the first quarter.

20 clinics remain in the Controlled Launch program after a total of 11 clinics have opted out at the end of Q1.

FDA meeting expected in Q2 2022 to discuss Additional Information letter regarding the sebaceous hyperplasia 510(k).

"2021 included a number of milestones for Pulse Biosciences, including regulatory approvals in the U.S., Europe, Canada and Australia, onboarding 70 Controlled Launch Program participants, the transition of 29 clinics to commercial use, and sales of our first two commercial CellFX Systems," said Darrin Uecker, President and CEO of Pulse Biosciences. "In 2022, our focus is on increasing utilization at commercial clinics to develop CellFX reference centers for the benign lesion market under new commercial leadership. At the same time, we will remain focused on expanding the CellFX System’s indications for use in dermatology and beyond."

Fourth Quarter 2021 Results

Revenue for the three months ended December 31, 2021 was $844 thousand. System revenue for the three months ended December 31, 2021 was $699 thousand, with approximately $600 thousand recognized on a non-cash basis resulting from the Controlled Launch Participants opting to acquire CellFX Systems. Cycle units revenue for the three months ended December 31, 2021 was $145 thousand resulting from the purchase of cycle units to be used with commercial systems.

Total GAAP gross loss* for the three months ended December 31, 2021 was ($0.4) million. Excluding non-cash expenses for stock-based compensation and depreciation and amortization, non-GAAP gross loss for the three months ended December 31, 2021 was ($0.3) million. Following the transition to commercial operations in the third quarter of 2021, all uncapitalized manufacturing operations costs are now recorded in cost of revenue. Prior to commercialization, these costs were recorded in research and development expenses.

Total GAAP operating expenses representing research and development, sales and marketing and general and administrative expenses for the three months ended December 31, 2021 were $15.0 million, compared to $13.8 million for the prior year period. Non-GAAP operating expenses for the three months ended December 31, 2021 were $11.2 million, compared to $11.1 million for the same period in the prior year. The year-over-year increase in operating expenses was primarily driven by the expansion of commercial and operational infrastructure, including increased headcount, to support commercialization activities offset by uncapitalized manufacturing operations costs now recorded in cost of revenue.

GAAP net loss for the three months ended December 31, 2021 was ($15.4) million compared to ($13.8) million for the three months ended December 31, 2020. Non-GAAP net loss for the three months ended December 31, 2021, was ($11.5) million compared to ($11.1) million for the three months ended December 31, 2020.

Full Year 2021 Results

Revenue for the full year of 2021 was $1.4 million. System revenue for the full year of 2021 was $1.2 million including $1.1 million recognized on a non-cash basis resulting from the Controlled Launch Participants opting to acquire CellFX Systems. Cycle units revenue for the full year of 2021 was $229 thousand resulting from the purchase of cycle units to be used with commercial systems.

Total GAAP gross loss* for the full year of 2021 was ($0.6) million. Excluding non-cash expenses for stock-based compensation and depreciation and amortization, non-GAAP gross loss for the full year of 2021 was ($0.4) million. Following the transition to commercial operations in the third quarter of 2021, all uncapitalized manufacturing operations costs are now recorded in cost of revenue. Prior to commercialization, these costs were recorded in research and development expenses.

Total GAAP operating expenses representing research and development, sales and marketing and general and administrative expenses for the full year of 2021 were $62.5 million, compared to $50.0 million for 2020. Non-GAAP operating expenses for the full year of 2021 were $46.9 million, compared to $38.8 million for the same period in 2020. The year-over-year increase in operating expenses was driven by the expansion of commercial and operational infrastructure, including increased headcount, to support commercialization activities and investments to expand use of the CellFX System outside dermatology.

GAAP net loss for the full year of 2021 was ($63.7) million compared to ($49.9) million for 2020. Non-GAAP net loss for the full year of 2021, was ($47.9) million compared to ($38.7) million for 2020.

Cash, cash equivalents and investments totaled $28.6 million as of December 31, 2021 compared to $20.5 million as of December 31, 2020 and $42.0 million as of September 30, 2021. Cash used in the fourth quarter of 2021 totaled $13.4 million compared to $9.2 million used in the same period in the prior year and $13.8 million used in the third quarter of 2021. Excluding net proceeds from equity offerings, cash used in the full year of 2021 totaled $52.9 compared to $34.9 million used in 2020.

* Gross loss is calculated as total revenues less cost of revenues.

Reconciliations of GAAP to non-GAAP operating expenses and net loss have been provided in the tables following the financial statements in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."

Webcast and Conference Call Information

Pulse Biosciences’ management will host a conference call today, March 31, 2022, beginning at 1:30pm PT. Investors interested in listening to the conference call may do so by dialing 1-877-705-6003 for domestic callers or 1-201-493-6725 for international callers. A live and recorded webcast of the event will be available at View Source