Pulse Biosciences Inc (PLSE) 2018 Q2 法說會逐字稿

Good day, ladies and gentlemen and welcome to the Pulse Biosciences Investor Update Call. (Operator Instructions)

I would now like to introduce your host for today's program, Brian Dow, Pulse Biosciences' Senior Vice President and Chief Financial Officer. Please go ahead.

Great. Thank you and good afternoon, everyone. And welcome to Pulse Biosciences Second Quarter 2018 Investor Update Call. On the call with me, today is Darrin Uecker, our President and Chief Executive Officer.

Before we begin, I would like to remind you that on today's call, we will be making forward-looking statements. These include statements regarding our plans and expectations relating to our operational, scientific, clinical and financial projections; products, including the uses and applications of such products; and other future events.

You should not place undue reliance on such forward-looking statements, which are subject to a number of assumptions, risks and uncertainties and may differ materially from actual results. These risks and uncertainties are more fully described in our Securities and Exchange Commission filings, including our annual report on Form 10-K and quarterly report on Form 10-Q. Investors are encouraged to reference these risks, uncertainties and other disclosures in those reports. Pulse Biosciences undertakes no obligation to update forward-looking statements as a result of new information or future events.

In addition, please note that today's call is being recorded and will be available for audio replay on the Investors section of our website at www.pulsebiosciences.com, shortly after the conclusion of this call. Investors electing to use the audio replay are cautioned that forward-looking statements made on today's call may differ or change materially after the completion of the live call.

With that, I would now like to turn the call over to our President and Chief Executive Officer, Darrin Uecker.

Thanks, Brian. Good afternoon, everyone, and thank you for taking time to join us on today's investor call. On today's call, we will be recapping the progress made since our last call in May, along with a brief discussion of our second quarter operating results and financial matters.

As background, for those of you new to Pulse Biosciences and a reminder for those of you who have joined our previous calls, at Pulse Biosciences, we're developing a proprietary Nano-Pulse Stimulation technology that stimulates cellular effects that can lead to positive therapeutic outcomes, utilizing ultra fast electrical pulses with nanosecond pulse durations from a billionth to under a millionth of a second. A nanosecond pulse is an incredible fast pulse. To give a sense of the scale, light travels roughly 1 foot in a nanosecond and 186,000 miles in a second. When these incredibly fast pulses are applied to cells, they have demonstrated a unique ability to enter the cell and disrupt the functions of the intracellular organelles, small operational structures within a cell, such as the mitochondria endoplasmic reticulum in the Golgi complex.

The disruption of the function of one or more of these cellular organelles can result in the dysfunction of the cell as a whole and initiate programmed cell death. We believe it is this ability to initiate programmed cell death through the temporary formation of pores in permanent disruption of the intracellular organelles that clearly differentiates nano-pulse stimulation from other energy-based therapies, such as radio frequency ablation or irreversible electroporation that can cause immediate damage to the outer cell membrane.

NPS induced transient nanometer-sized pores allow ions to pass, resulting in the release of calcium ions from the endoplasmic reticulum, the termination of mitochondrial membrane potential and a disruption of the Golgi apparatus, all of which in turn results in a signaling cascade that we believe results in program cell death in benign non-cancerous lesions and immunogenic cell death in malignant cancerous lesions.

Immunogenic cell death is a form of program cell death by which cells are induced to die in a manner that stimulates the immune system to both clear the treated tumor cell and enroll immune system cells, such as cytotoxic T-cells to recognize and eliminate cells of the same tumor type.

The ability of NPS to get inside the cells, a non-toxic, non-thermal application of electrical energy, while preserving the integrity of the outer cell membrane is the cornerstone of this unique technology and we believe will lead to several compelling tissue treatment applications, in particular in the treatment of cancer.

NPS is establishing an outstanding safety record. To date, over 100 patients have received over 750 NPS applications in skin with no adverse events reported.

Our mission at Pulse Biosciences is to build a viable company that designs, produces and commercializes Nano-Pulse Stimulation technology to improve and extend the lives of patients. Our strategy to achieve this is to develop a therapeutic tissue treatment NPS platform, demonstrate the unique medicinal benefits of the platform in a number of compelling treatment applications and commercialize clinical applications to deliver the benefits of NPS to physicians and their patients.

Within each application area or vertical market, we are working with key opinion leading physicians to develop and execute pilot studies to determine where this technology is the highest value to clinicians and patients from a patient outcome, market need and time-to-market perspective. We'll then determine the optimal path to deliver those applications to the market.

Now I'd like to focus on some of our clinical advancements and recent progress during the quarter, focusing first on our dermatology program.

As we have discussed on previous calls, we are developing a portfolio of skin lesion applications that take advantage of the unique cellular properties and excellent safety profile of NPS by generating compelling clinical data in support of a commercial launch. We believe we need multiple proven applications to drive specific regulatory indications and deserve as a foundation to commercially introduce NPS in dermatology.

During the second quarter, we released and discussed the positive results from our seborrheic keratosis, or SK, clinical study our first NPS study evaluating a clinical application. The data was presented at the 2018 American Society for Laser Medicine and Surgery in April by Dr. Tom Rohrer, the immediate past President of the American Society of Dermatologic Surgeons. This was the first public presentation of data from this multicenter study and demonstrated positive results for the treatment of SK lesions with a single NPS treatment both in terms of the SK lesion clearance. 82% of all lesions were reported clear or mostly clear by investigator assessment and also in terms of safety with 0 reported adverse events.

In consultation with Dr. Rohrer and a distinguished board of top dermatology advisors, we selected the SK lesion study based on the histology findings from our initial dose ranging excise skin study that demonstrated the unique non-thermal cellular effects of NPS in skin, that is the ability to destroy cells in the epidermis and dermis, while sparing the non-cellular tissue of the dermis with minimal inflammation leading to a positive healing outcome.

Our dermatology advisors directed us to the treatment of SKs as they are the most common benign skin lesion that resides in the epidermis, making them well suited for NPS's unique cellular effect.

The clinical success of the SK study gives us the confidence to pursue a number of applications that will leverage the unique mechanism and reassuring safety profile of NPS as we develop a pipeline that will lead to the ultimate commercialization of NPS in dermatology.

With this in mind, we recently announced the treatment of our first patients in a study to evaluate the safety and efficacy of Nano-Pulse Stimulation for the treatment of sebaceous hyperplasia or SH lesions. SH is an unsightly benign skin lesion that typically appears on facial skin, is considered a difficult to treat condition with available modalities.

SH occurs when the sebaceous glands, which are small glands in the dermal layer near the hair follicles, can become enlarged with a trapped oil produced by the sebaceous gland, called seba. This creates small, shiny yellowish lesions or bumps, usually between 2 and 4 millimeters wide on the skin. SH lesions typically appear on the face, especially the forehead and nose, the back, groin, armpits and shoulders and is estimated to affect as much as 1% of healthy adults in the United States.

The challenge with treating sebaceous hyperplasia is if the glands are in the deeper dermis, below the epidermis or top layer of the skin. So any thermal modality would need to penetrate through the epidermis and dermis to the sebaceous glands, which can cause significant collateral damage to the dermis and an unwanted residual skin effect, such as scar tissue or hypopigmentation.

Because NPS offers a non-thermal cellular effect that has the potential to reach down into the dermis and affect the cells of the sebaceous glands while sparing the surrounding dermis, the NPS mechanism is ideally suited for targeting the sebaceous gland without damaging the dermal tissue that surrounds the gland. This selective targeting and destruction of the sebaceous gland has been demonstrated in histologic studies of normal skin with no evidence of dermal damage.

The multicenter study of NPS in the treatment of SH is expected to enroll up to a total of 60 patients at 5 leading medical centers across the United States that specialize in the treatment of skin diseases. Patients with a minimum of 2 SH lesions and up to 5 lesions will be enrolled. The lesions will be treated with NPS, leaving one as a control and followed for a 60-day period. The study's primary success measurement is the degree of clearing of benign SH lesions as rated by the investigator at the final study visit. Since these lesions almost always appear on the face, another important outcome assessment is the return of normal appearance of the skin after the lesion is cleared.

We believe this study is an important next step in developing our portfolio of dermatology applications. It demonstrates the ability to treat cellular lesions deeper in the dermis than the prior SK study and our dermatology advisors tell us is an unmet need for which an effective and safe technology will be met with high patient demand.

This SH study also enables us to further demonstrate the excellent safety profile and favorable patient experience of NPS treatments as we look to advance our NPS platform into additional applications. We expect to complete SH enrollment in the third quarter of this year with data becoming available by the end of 2018. To that end, we are off to a very good start in achieving this milestone as 28 patients have already been enrolled and treated with all 5 centers participating.

In the second half of the year, we plan to begin several additional NPS dermatology studies in benign lesions. Importantly, we expect to utilize our next generation NPS system in one or more of these studies when the system is ready for clinical use. This new NPS system was designed with commercialization in mind, meaning it can be easily operated by the treating physician and has a streamlined and attractive design that can be manufactured at volume and cost structures that will support commercialization of our profitable NPS device platform in dermatology.

We expect to move forward with the regulatory filing in the first half of 2019 based on the safety and efficacy of the clinical data and will continue to develop our portfolio of dermatologic applications as they move through the pipeline. Based on the anticipated regulatory timeline, we should be in a position to launch our NPS technology into dermatology with a number of compelling applications during the second half of 2019. We will be providing details on upcoming studies and timing for the regulatory filing and commercialization in the coming months.

We continue to have a strong presence in the dermatology community with our NPS technology. Later this week, we will be attending the Controversies & Conversations in Laser and Cosmetic Surgery Advanced Symposium in Boston being held August 3rd through the 5th. Dr. Tom Rohrer will be presenting the seborrheic keratosis study data to this audience.

Turning now to our immuno-oncology program, we've stated previously, we believe NPS may afford a completely new immunotherapy treatment modality in certain cancers. Preclinical research has demonstrated that NPS can eliminate treated tumors, disrupt the tumor microenvironment of treated tumors and induce immunogenic cell death. As we have reported in previous calls, we continue to make investments and progress in preclinical oncology research, veterinary medicine oncology research that we believe has human translational benefit and our initial human pilot study to demonstrate NPS's ability to initiate an immune response.

Yesterday we achieved a significant step forward for Pulse Biosciences as we announced the treatment of the first subject in our initial clinical study evaluating NPS in basal cell carcinoma or BCC, the most common form of skin cancer. BCC lesions usually develop on the skin that gets sun exposure, such as on the head, neck or back of the hands, and is especially common on the face and nose. BCC tends to grow slowly and rarely spreads to other parts of the body.

4 leading skin cancer surgery centers in the United States will participate in this multicenter trial scheduled to enroll up to 75 patients with biopsy-confirmed BCC lesions. The BCC lesions will be treated with NPS and subsequently excised, which is the standard of care for most BCC lesions. Both tissue and blood samples will be evaluated to characterize BCC elimination and changes in the immune response when comparing pretreatment diagnostic biopsies to post-treatment excised tissue.

A control group will be treated with standard cryoablation treatment, commonly known as cryotherapy, and will service as a comparison to NPS. This unique NPS and resect study design allows us to perform unique tissue assessments, see the effects of NPS treated tissue while preserving the standard of care BCC therapy for the patient.

This is the first human study that will allow us to look at potential immune response changes as a result of NPS and builds on all the work Pulse Biosciences has done and continues to do in dermatology where we have demonstrated the unique cellular effect, excellent safety profile and high patient tolerability of NPS in skin. Because these BCC patients are treated by dermatologists, it also allows us to continue to utilize the prestigious group of dermatology investigators we have been using in our other skin studies, taking advantage of their experience with NPS to date.

In addition, we are privileged to be working with Dr. Rob Pierce and the Fred Hutchinson Cancer Research Center in Seattle to analyze the tissue samples and assess the destruction of the BCC treated lesion and changes in the immune response. Dr. Pierce, who is a Board-certified anatomic pathologist, is an expert in evaluating immune cell changes in the tumor microenvironment and is an incredible resource to have working on this project. We expect to complete enrollment in this study by the end of this year and have a complete dataset available in the first quarter of 2019.

In veterinary medicine, following on the late stage canine oral melanoma study conducted last year, that demonstrated excellent safety, patient tolerance, ease of application and evidence supporting the potential to eliminate treated oral melanoma tumors, we recently started a follow-on multicenter canine study evaluating NPS in the treatment of stage 1 and stage 2 canine oral melanoma. Based on earlier results and the strong safety profile of NPS, our veterinary medicine partners believe treating earlier in the disease progression will provide enhanced opportunities to demonstrate the potential of NPS in this disease state.

This study is being conducted with our veterinary research partners at Veterinary Centers of America. VCA Dallas, the partner in our first study, will be continuing in this next study as will additional VCA clinics in California and New Mexico.

In addition to our clinical work, we continue to drive our preclinical research, aiming to provide further evidence to support the unique potential of NPS in treating cancer. In June, our Chief Science Officer Dr. Rich Nuccitelli and I attended BIOM 2018, the joint annual meeting at the Bioelectromagnetics Society and the European Bioelectromagnetcs Association in Piran, Slovenia. Dr. Nuccitelli's invited podium presentation of our nanosecond plus stimulation study of intracellular organelle changes in rat liver tumor cells in vivo using electron microscopy was well received and generated significant interest in the new evidence of the NPS mechanism of action. We continue to invest in our preclinical research and expect to report on these data as they are published or publicly presented.

Before I conclude my comments on our operational progress, I would like to briefly comment on the Form 8-K filed today regarding the changes to the committees of our Board of Directors. Earlier this month, we received a request from Director Maky Zanganeh to be excused from participation in our audit and compensation committees to attend to personal matters requiring her attention. Last week, the Board did just that and excused her from the committees. The Compensation Committee was reconstituted by assigning the Comp Committee Chair responsibilities to Director Manmeet Soni, who is already a member of the committee and appointing Director Tom Fogarty to the committee.

With respect to the Audit Committee, the specific independence rules for audit committee members prevent the appointment of one of our other existing board members to the committee. NASDAQ rules require a three-member audit committee, with all members meeting the audit committee membership requirements. As our committee is now two, we are not in compliance with NASDAQ listing rules. As required, we notified NASDAQ of the circumstances and NASDAQ has provided us with their standard letter notifying us of the noncompliance and affording us a time period for resolution through our next annual meeting of stockholders, which we expect to hold in May 2019. The Board made its decision knowing the implications and with the full confidence that the matter will be resolved well in advance of the timeline afforded.

As with Maky, during conversations between Maky and board members, she has restated her support of Pulse Biosciences and remains dedicated to being a board member. Maky herself is fine and we wish her the best as she attends to family matters.

I would now like to turn the call back to Brian to discuss our financial results in the first (sic) [second] quarter of 2018.

Thanks, Darrin. During the second quarter of 2018, the ongoing development and progress made in our clinical programs, the development of the next generation NPS system and the continued growth in our business drove our ongoing investments as cash use for the quarter totaled $5.9 million, resulting in an ending cash and investments balance of $27.5 million. This reflects a 25% increase over the first quarter cash use of $4.7 million. Although a portion of the increase is readily attributable to increased activity in our clinical studies, technology development and general growth of our business, during the second quarter we also incurred $1 million of cash use relating to the renewal of our corporate insurance policies for the 2018-2019 policy year. The expenses associated with the renewed policies will be recognized over the next several quarters.

Excluding the timing associated with our insurance renewals, cash use increased approximately 4% quarter over quarter.

Turning to operating results. Net loss for the second quarter of 2018 totaled $9.2 million, reflecting a $3 million or 50% increases, compared to the net loss of $6.2 million for the second quarter of 2017. Net loss for the periods include non-cash stock based compensation charges of $3.2 million and $2.8 million for 2018 and 2017 respectively.

Similarly, year-to-date net loss for the 6 month periods ended June 30, 2018, and 2017 reflect similar operational growth with net loss increasing to $17.8 million in 2018 from $9.4 million during 2017. Again, stock-based compensation charges reflect a significant component of the expenses incurred, contributing $6.6 million and $3.1 million to the results of 2018 and 2017 respectively.

The year-over-year increase in net loss reflects the progress of building our company over the intervening period. Headcount has increased to 44 at June 30, 2018, from 27 a year earlier. To put this in perspective, we ended December 2016 with a headcount total of 13. Research and development expenses increased to $4 million for the second quarter of 2018, an increase of $1.8 million or 86% compared to the $2.1 million reported for the second quarter of 2017.

On a year-to-date basis, R&D expenses increased to $7.1 million from $3.8 million, an increase of $3.3 million or 85%. A significant portion of the increase reflects increases in R&D headcount as headcount increased to 31 as of June 30, 2018, from 19 at June 30, 2017, and 9 at the end of 2016.

Also contributing to increased R&D expense are increases in clinical trial expense, reflecting increased activity and patient counts in completed and ongoing studies, protocol development for recently commenced and soon to commence studies, engineering and prototype expenses reflecting the design, development and prototyping of our next generation NPS delivery system and support expenses relating to the increase in breadth of operational activities.

R&D expense will continue to increase going forward, reflecting increases in the number of patients enrolled in our ongoing and future clinical studies, ongoing and future preclinical research furthering the evidential support for NPS and in preparation for future clinical studies particular in immuno oncology studies and development of enhanced and commercial ready versions of our NPS delivery system.

Turning to general and administrative expenses, G&A expenses increased to $5.2 million for the second quarter of 2018, an increase of $1.3 million or 32% compared to $3.9 million reported for the second quarter of 2017. On a year-to-date basis, G&A expenses increased to $10.6 million from $5.3 million, an increase of $5.3 million or roughly double. The quarter-over-quarter increase reflects increased compensation reflecting the increase in G&A headcount, which increased to 13 as of June 30, 2018, from 8 at June 30, 2017, and 4 at the end of 2016. In addition, second quarter 2018 included additional professional fees reflecting our transition to a Big Four accounting firm for audits and reviews and legal expenses associated with registration statement filings for past financings and preparation for and carrying out our reincorporation in Delaware that was approved by our stockholders at the May annual meeting.

On a year-over-year basis, the significant increase reflected in comparison between year-to-date 2018 and 2017 expense can be attributed substantially to the $2.5 million increase in stock-based compensation. As we discussed on previous calls, equity grants to employees were deferred in 2016 and early 2017 pending the approval of our new equity plans at the 2017 annual meeting. Once the plans were approved, the backlog of equity grants was resolved, leading to an expense inflection during May 2017.

Going forward, we anticipate measured growth in G&A, reflecting the operational support needs of the organization as the operational tempo of our clinical studies and system development initiatives increase.

Turning toward financing alternatives relative to our cash position for a moment. With $27.5 million in cash and investments at the end of June, we have sufficient cash to fund our operations for at least the next 12 months. With that said, we are currently collaborating with our Board of Directors to evaluate our next round of financing. We are looking at various options and alternatives and at present, we are seeking a financing structure that will permit participation in the round to existing stockholders. Consistent with our past discussions, we would be considering a financing involving the issuance of 15% to 20% of our existing outstanding shares. You'll note that I'm not referring to dilution as we are seeking a structure that will afford shareholders the opportunity to maintain their proportionate ownership. Plans are still being discussed and may change, but that is our current thinking.

Consistent with our previous guidance, we expect cash use for 2018 to total approximately $24 million. And that concludes my comments on the financial results. I'd now like to turn the call back to Darrin.

Thanks, Brian. This is an exciting time for Pulse Biosciences. As Brian mentioned in his comments, we've grown Pulse Biosciences from 13 employees at the end of 2016 to 44 employees at the end of June 2018. That’s more than triple the number of employees in 18 months. This team is focused on our mission of delivering NPS for the betterment of patients to improve and extend their lives. We are accelerating our progress and delivering a next-generation NPS system to the clinic and to clinical applications that take advantage of the unique mechanism of action of NPS.

With the release of data from our first skin application earlier this year in seborrheic keratosis, we are moving rapidly to develop a portfolio of skin based applications that take advantage of what we believe are the unique benefits of NPS in dermatology. Today we detailed the recently started SH study, an application with a clear patient need that we believe NPS can fill. Enrollment in the SH study is moving rapidly, which we believe is a sign of the confidence of the investigators and how common this skin lesion is within their practices.

Over the coming months, we will be announcing a pipeline of additional applications that will take advantage of the unique benefits of NPS in dermatology. Again, we expect commercialization based on this pipeline converting to a portfolio of applications in the second half of 2019.

We also communicated an important step in our immuno-oncology program, the start of our initial NPS BCC study, an NPS and resect study that will provide data on BCC cellular destruction, as well as NPS initiated immune response changes. This is the first human study that will provide data on immune response changes initiated by NPS. And we're thrilled with the physicians and scientists we've brought together to execute this study. We expect enrollment to complete in this study by the end of the year with results available in early 2019. In conjunction with our ongoing preclinical work and our work in veterinary medicine, we expect to have a steady flow of data over the coming quarters.

We're excited about our progress and our prospects of Pulse Biosciences and appreciate you taking the time to listen in on our investor update. That concludes our prepared remarks. Operator, we would now like to open the call to questions.

(Operator Instructions) Our first question comes from the line of [Jim Houndsworth], private investor.

Before I have my questions, I want to let you know that Tony Taden fell and broke his leg and has multiple fractures below the knee. Tony and I have been around since the first annual meeting of Pharmacyclics, so there's many people out there who might know Tony and I just wanted to wish him well on a speedy recovery.

The stock price today didn't do very well. It recovered at the end. I suppose some true believers were still there. But it was confusing. It was confusing because we didn't know whether it was good or bad news that the BCC study requires the removal of the cells before it's analyzed. So that just seemed like it was adding another step before there was an in situ study and was just prolonging the FDA approval process. So I'd like to ask Darrin, I guess, for the third time to clarify then our pathway, our road map to commercialization and repeat what he said about when we will be making the application for FDA approval.

I'm really sorry to hear about Tony as well and thanks for passing along that information. Yes, so let me talk about your first comment on the BCC study. So I think what we have said previously is that from an immuno-oncology perspective, our strategy has always been to enter into an initial study which is going to give us information on the ability of NPS to induce an immune response. To really do two things. To one, provide local control, which means to locally destroy those cells, but also secondarily to induce an immune response. And so the BCC study is that study that we're executing now. And the way that we think is most expeditious and the best way to demonstrate that is to do a study like this, which we call an NPS and resect study, which we believe in a short period of time will allow us to understand the effect on those cells both in terms of cellular destruction, but also in terms of the immune response.

And we followed a similar path in our dermatologic applications where we did some excise skin studies to show basically the mechanism of action of NPS in that skin. So you'll remember some dose-ranging studies in dermatology that really showed us what that initial mechanism was in skin and how it changed with different doses. So that was very important to then leading us to the SK study and now the SH study, which take full advantage of that mechanism.

So likewise, in immuno-oncology, we're following a similar path where we believe an NPS and resect study makes a lot of sense because in a very short period of time it's going to allow us to understand the effect of NPS in that disease state while allowing those patients to maintain the standard of care. It also allows us to have that tissue assessed by experts in the field, which we described in our remarks.

And so this will be the first step in immuno-oncology and dermatology. We're well on our way, we believe, towards commercializing NPS in dermatology. As we mentioned, we had a very successful SK study. We're almost halfway into the SH study, which just started over about a month ago I think. We expect to complete that in this quarter and have data in the fourth quarter. And then again, we have a pipeline of other applications coming behind it.

So I think our general strategy will be in these different areas, like dermatology, that will deliver on a portfolio of applications. We'll generate clinical data in those applications and those will drive specific indications and regulatory clearances. So first that will happen in dermatology and then that will be followed on the immuno-oncology side as we develop that pipeline as well.

So sounds to me like it was just the reverse of what I was thinking is that by doing it by removing the tissue and examining it outside the body, after the NPS, it's actually going to be a faster process than if you did it in situ.

Yes. So it's going to be faster to understand the effect of NPS on those cells from a destruction perspective, and also from our ability to induce an immune response. So it's going to give us a lot more insight into what's happening in that tissue in I believe a shorter period of time. And so that's why we chose that. We think it's a very exciting study for the company. It remains to be seen, I mean this is a study and we'll assess and see what we see. But we're excited to be in it and the company is full bore behind it.

Well, I'm glad you clarified that. That's good news. I also wanted to comment that you mentioned that you're going to develop a pipeline and I just wanted to say that I think that'll be very positive. That'll give investors’ confidence that they could see what your roadmap is and what the timeline is. So I really encourage you to do that.

And then finally, I think Bob talked about -- or Brian, excuse me -- talked about raising money without dilution. And I'm not very -- I'm not a financial officer, but the only way I could figure to do that is to borrow money and ramp it and sell equity. So is that part of the options you're looking at?

No, let me clarify what I was referring to in that. We are looking at financing vehicles that will allow existing shareholders to maintain their proportionate share of the company in this next round of financing. So it would not be our intention to flat out dilute existing shareholders. They will have the opportunity to maintain their proportionate ownership. So in the next round, current investors will have the opportunity to participate is the current thinking.

And one last comment to you, Jim, on the pipeline. We will be communicating that over the next several months as we sort of enter into those studies as well. And I think everybody will see very clearly what that pipeline looks like and how encouraging it is.

Our next question comes from [Mike Rapids], a private investor.

I'm wondering, Bob Duggan isn't on this call. Does that reflect any of his involvement in the company going down? How should investors look at that?

Yes, you shouldn't -- thanks, Mike, and thanks for calling in. I appreciate it. You should not read into that at all. So Bob was on the last couple of calls as he became the Chairman of the company and participated in those calls so he could kind of reflect his engagement in the company at that time. But him not being on this call, you should not take any way at all. Bob is very involved as the Chairman of the Board and very involved with the company. We interact on a very regular basis. He's extremely supportive. So don't read into that whatsoever.

(Operator Instructions) Our next question comes from the line of [Richard Gant], private investor.

It was reported last fall that Pulse announced a grant of stock options to five new employees to be exercised one-fifth each anniversary on the use to loser basis. Shortly before that, Old Dominion University announced that Mr. Duggan had given them $41 million to research its wind energy program that the government grant had been withdrawn for that research. And then sometime later, Old Dominion announced that they received $42 million from Pulse Biosciences and for that, Pulse got all of its intellectual property and all the results of its patents and all of its intellectual property regarding Nano-Pulse research. And assuming that we're talking about the same $40 million, were any or all of the five new employees who received stock options research scientists at Old Dominion?

Okay. Hey, [Richard], it's Brian. Thank you for calling in and thanks for your question. I'm going to parse that down into a couple of pieces for a moment. First, answer your last question, no, we were not -- the option grants that were disclosed as part of our inducement grant program that we issue press releases on at the time of making the grant, those were not owe to you researchers that were being hired. This was for building out the team here at Pulse Biosciences.

Stepping back to some of the disclosures and some of the news coverage about the various numbers from $30 million to $40 million relative to Old Dominion University and Pulse Biosciences, Old Dominion University was the source of the intellectual -- or one of the sources of intellectual property upon the foundation of the company back in 2014. And from that, for their contribution of intellectual property to Pulse Biosciences, they were afforded shares of common stock in an ownership percentage in exchange for royalty-free paid-up licenses to their technology and opportunities to retain a relationship with them to maintain future rights to intellectual property being developed.

That stock that they held until middle of last year was in exchange for the patents to found Pulse Biosciences. It turns out that this was the most successful technical transfer that Old Dominion University has had and they tend to look very favorable on that and the relationship we have with them is outstanding and we do plan on continuing that relationship.

With respect to any other investments being made at Old Dominion University and some of the things you were referring to, that's not something that we're familiar with, so it's not something we'd be able to comment on.

What did you give to Old Dominion University to get their data and the right to their research?

They received an ownership stake upon the formation of the company back in 2014. So you'll recall that Pulse Biosciences was formed through the amalgamation of intellectual property estates, of Old Dominion University, AMI at the University of Southern California and a local company here in the Bay Area, Bioelectromed. And it was in that amalgamation of intellectual property estates that they were issued an ownership stake at that time.

So Old Dominion didn't get $40 million, is that right?

They received a substantial ownership stake in Pulse Biosciences that with the development of the business and the increase in stock price they were able to obtain a return of roughly $40 million. We did not pay them $40 million.

Thank you for your question.

Thank you. And now I'd like to turn the program back to Darrin Uecker for any further remarks.

Thanks, Operator. And thanks again to everyone for joining us on today's call and allowing us to share our continued progress. As I said, we're very excited about the progress that we're making and we very much look forward to continuing to share that progress as we go forward. Thank you.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.