Pulse Biosciences Inc (PLSE) 2021 Q1 法說會逐字稿

Greetings, and welcome to the Pulse Biosciences First Quarter 2021 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Philip Taylor. Thank you, sir. You may begin.

Thank you, operator. Before we begin, I would like to inform you that comments and responses to your questions during today's call reflect management's views as of today, May 10, 2021, only and will include forward-looking statements and opinion statements, including predictions, estimates, plans, expectations and other information. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are more fully described in our press release issued earlier today and in our filings with the Securities and Exchange Commission.

Our SEC filings can be found on our website or on the SEC's website. Investors are cautioned not to place undue reliance on forward-looking statements. We disclaim any obligation to update or revise these forward-looking statements.

We will also discuss certain non-GAAP financial measures. Disclosures regarding these non-GAAP financial measures, including reconciliations with the most comparable GAAP measures, can be found in the press release. Please note that this conference call will be available for audio replay on our website at pulsebiosciences.com on the News and Events section of our Investor Relations page.

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

Thank you, everyone, for joining us this afternoon at this exciting juncture for Pulse Biosciences. On today's call, I'm pleased to discuss our recent accomplishments and business updates, including the commercial, regulatory and clinical progress we have made so far in 2021. Ed will provide details from the field on our initial commercial experience with the CellFX System, then Sandy will share the first quarter 2021 financial results. I will then conclude, and we will open up the call for a question-and-answer session.

From the beginning of Pulse Biosciences, our mission has been to offer bioelectric medical solutions that make meaningful differences for the betterment of patients and clinicians. This is now a reality. In February, we received FDA clearance to market our product, the CellFX System with CloudConnect services, for use in dermatology. Just 10 days prior, we had received CE Mark regulatory approval to market the system in Europe. These achievements have advanced the company into our next chapter of growth.

In 2021, we have 2 priorities that inform our current corporate strategy. Our focus on the top priorities are executing a controlled launch program to drive adoption of CellFX System utilization among key opinion leading aesthetic dermatologists to set the foundation for a full commercial launch in late 2021 into 2022 and expanding the CellFX System's commercial potential by continuing to develop new applications that address the needs of patients. We are confident that disciplined focus and resource allocation to these objectives will maximize the value of the CellFX System in the market over the long term.

Before diving into priorities specifically, I would like to describe and remind everyone about the uniqueness of our technology and its opportunity to address unmet needs of clinicians and patients alike. The CellFX System is a multi-application platform that administers our proprietary Nano-Pulse Stimulation or NPS technology with unique benefits desirable for use in dermatologic procedures. NPS is an entirely new energy modality that delivers nanosecond pulse nonthermal energy that affects only cellular structures but leaving noncellular collagen-rich skin tissue unharmed, which helps promote a better healing profile overall.

The differentiated cell-focused mechanism of action of NPS has proven to be desirable in dermatology as it provides aesthetic skin specialists the ability to address common skin conditions that have generally been challenging to treat with current traditional methods.

The CellFX System is a software-enabled tunable, cloud-integrated console with highly customizable configurations of applicators and energy levels to enable a wide range of procedural setting to address multiple dermatologic conditions. Built into the CellFX System is our proprietary integrated cloud software infrastructure called CellFX CloudConnect. It is the backbone of our innovative utilization-based business model.

It aligns the interest of patients, practices and the company and is the first of its kind for energy-based medical devices. Physicians are able to perform procedures and charge on a per-lesion basis without the constraints of physical disposable costs and inventory burden as is the case with other medical device models.

CellFX CloudConnect provides a novel suite of services that integrates the customer, the system, our e-commerce customer portal and practice management tools to track utilization data and other metrics, while on the back end, connecting to our internal customer relationship management system and enterprise resource planning system. It is through the CellFX CloudConnect suite of services that we're able to provide aesthetic practices key insights into the productivity and profitability of their CellFX franchise.

We're very excited about the initial feedback we're hearing from customers regarding the seamless integration of the CellFX System with CloudConnect services into their practice. We believe this advanced delivery model will not only drive utilization of CellFX procedures but also will create a premier experience and growth potential for our valued physician customers and their patients.

Turning to our main focus for the year. Execution of our controlled launch program, I'd like to discuss the benefits and advantages of our strategy for rolling out our novel technology to aesthetic dermatologists. We are introducing the CellFX System to the U.S. and European markets through a deliberate and measured controlled launch program. Our team has developed and begun to execute a thoughtful and methodical commercial plan designed to ensure broad adoption and long-term success for the use of our CellFX System in aesthetic dermatology.

The goal of the Controlled launch program is rooted in a deep understanding of the aesthetic dermatology market and best practices for introducing a novel technology into this market. Our intention is to produce and document outstanding patient experiences by partnering with top KOLs and implementing CellFX System best practices in their franchises. These influential KOLs become trusted advocates of the CellFX System and NPS technology, promoting the adoption of a new procedure among their peers. These partnerships also generate critical feedback, which can then be leveraged across our training and guidelines for other customers.

The controlled launch program represents mutual investments by Pulse Biosciences and each participating clinic. In exchange for qualitative data on all aspects of the first 40 patients they treat, clinics will earn incremental credits towards the cost of their CellFX System. These clinics have proven their commitment to starting CellFX System franchises by investing the time to complete multiple virtual and practical training programs. They have indicated excitement and a strong desire to educate and offer patients the benefits of NPS. As previously stated, we're planning to include 75 leading aesthetic clinics across the U.S. and the EU in this program.

I'm very pleased to say that because of the experience and preparation by our team, we were able to begin onboarding the first clinics participating in the controlled launch program within weeks of CellFX marketing clearances in both the U.S. and EU. We ended quarter 1 with 15 of the Controlled Launch sites fully trained and beginning to treat patients. This is consistent with our plan to have the majority, approximately 45 to 55 clinics, onboarded by the end of quarter 2 with the remaining in quarter 3. Ed will provide details on the early experience to-date later in the call.

To remind you, we're also planning to expand our controlled launch into Canada, pending Health Canada approval for the CellFX System. We recently responded to what we believe is the final question from the Health Canada reviewer and expect the review to be completed in the second quarter.

Now I will discuss our other top priority in 2021, progress our CellFX System clinical application research and regulatory strategy. We believe that Nano-Pulse Stimulation technology delivered by the CellFX System can be highly effective across multiple aesthetic dermatology applications and has the potential to be effective in additional therapeutic areas as well. To fully realize and offer the full potential of the CellFX System to clinicians and patients, investigational and clinical work is a high priority at Pulse Biosciences.

In the U.S., we will expand beyond the current general indication for the CellFX System with a step-wise regulatory strategy that includes pursuing specific indications for high-value applications. As we described previously, the first specific indication we are pursuing is for the treatment of sebaceous hyperplasia, a small benign lesion that occurs primarily on the face and where clinicians lack a suitable treatment that provides durable lesion clearance with an acceptable cosmetic outcome for patients.

We believe the CellFX System can offer such a treatment for sebaceous hyperplasia and have executed an FDA IDE-approved comparative study using the CellFX System and comparing it to electrodessication. We completed all treatments and follow-up of the patients in this study during the first quarter. And at this point, we're in the final stages of preparing a 510(k) submission and expect the submission to go to FDA within the next several weeks.

The second specific indication we are pursuing is in cutaneous nongenital warts. And we continue to enroll and treat patients in our FDA IDE-approved pivotal comparison study. We have treated 51 of 150 patients and expect to complete enrollment of the study as early as the end of the second quarter or early in the third quarter of 2021. Given this time line, we remain on track to use the data in a 510(k) submission to the FDA as early as the fourth quarter of 2021.

We plan to continue to expand applications and indications for specific benign lesions to drive utilization of the CellFX System in clinics. We will not pursue a specific indication for all applications but will focus on those applications that can be benefited by a specific indication, which allows clinic to market directly for those indications to their patients.

We believe we have good clinical data in a number of additional benign lesions, some in feasibility and others further along, including seborrheic keratosis, syringoma, nevi and acne. It is our intention to maximize the value of the CellFX System for dermatologists by expanding its use among the most prevalent and compelling lesions to physicians and patients.

Whether all of these potential applications will ultimately be launched commercially is dependent upon a number of factors that need further validation. But today, we believe these all represent compelling clinical applications that are worth the investment. We will plan to provide more detailed time lines for these applications as they get closer to clinical, regulatory and commercial milestones.

We're also pleased to report today an important development in our broader application expansion strategy to pursue nonbenign lesions. About a week ago, we received FDA IDE approval for a treat and resect basal cell carcinoma feasibility study. Basal cell carcinoma, or BCC, is the most common form of skin cancer and the most frequently occurring form of all cancers. In the U.S. alone, an estimated 3.6 million cases are diagnosed each year according to the skin cancer foundation.

Current standard of care is wide-margin surgical excision, which can result in noticeable scarring. We believe the CellFX System can provide a tissue-sparing and cosmetically beneficial treatment for smaller BCC lesions in cosmetically sensitive areas, such as the face, and our scientific advisers believe this represents a compelling application for a large number of their patients. The objective of this feasibility study is to demonstrate the CellFX System can be used to eliminate a BCC lesion and to get an initial assessment of the cosmetic outcome of the treatment.

In this study, BCC lesions will be treated with the CellFX System. Approximately 60 days after treatment, the treatment area will be assessed for cosmetic outcome, and then the lesion will be excised using the standard of care wide-margin excision. Post-excision, the tissue will be reviewed by the study pathologists to determine if there are any remaining basal cells in the treatment area.

We believe this study will provide sufficient evidence to support a follow-on pivotal study and may lead to a specific indication for the treatment of BCC. The feasibility study will begin enrollment this quarter, and we expect to be fully enrolled with 30 patients by the end of quarter 3. If successful, a pivotal study would follow in the (inaudible) half of 2022.

We believe that the inherent nature of NPS can provide benefits across different applications in health care. And as we noted in our Q4 call, we're constantly examining and expanding the therapeutic range of applications relevant to the CellFX System and CloudConnect platform. We continue to invest in the early development of application areas outside of dermatology, leveraging the knowledge and experience we have gained. We're planning to provide more detail on these application areas and our plans to pursue them in the second half of the year, potentially in an investor R&D day so that we can provide sufficient detail on our growing pipeline of applications. As we have shown to this point, our development and clinical teams will remain committed to discovering and unlocking the full potential of our powerful technology, and we will continue to support these expanded efforts with the required measured investments.

For more on our activity in clinics right now, I will turn the call over to Ed Ebbers.

Thanks, Darrin. First of all, I want to say it is just great for the growing commercial team of 15, 9 in North America and 6 in Europe, to be in the field in the U.S. and Europe, helping our first customers onboard the CellFX Controlled Launch experience. Our team is continuously gaining practical experience with both physicians and patients. The anticipated warm reception for our unique cell-specific technology among these KOLs has exceeded our expectations in the early going. As intended, our controlled launch participants are contributing to our knowledge base on uses for the CellFX System.

Our scientific advisers have done a great job setting a high bar for the clinical profile for NPS technology, and our first controlled launch participants are thrilled to now have an advanced technology solution in hand that addresses unmet needs in aesthetic medicine, offering this unique nonthermal CellFX procedure to patients with lesions that are difficult to clear with older technologies that use heat or cold.

While our planned controlled launch experience is still in its very early stages with an initial group of KOLS, we are pleased and excited to report on our controlled launch progress as well as our continued engagement with the scientific community with our clinical research projects in support of new applications for the CellFX platform.

As we have noted, our experience and marketing research in the aesthetic procedure specialty market has shown that the acceptance and adoption of new energy modalities like the CellFX System is heavily impacted by the influence of key opinion leaders or KOLs in anesthetic medicine. For that reason, we designed our controlled launch program to partner with these clinics and ensure very early positive clinician and patient experiences as we optimize the commercial learning curve required for new CellFX System users.

In the future, as we transition from a controlled launch to prospecting the next wave of commercial early adopters, we expect that the trusted advice and influence of these controlled launch KOLs and their best practices guidance will be instrumental in laying the clinical and commercial foundation for the adoption and commercial success needed to grow a CellFX franchise in these high-end aesthetic practices.

Controlled launch success begins with disciplined physician selection. In the months preceding the controlled launch, we carefully selected and qualified likely candidates for the controlled launch participation based on established criteria, including past experience with new energy technologies that have made the jump from clinical trials to commercial use.

Our goal was to narrow down our (inaudible) to 75 physicians to roll out the CellFX System. Our final selection of the first wave of early controlled launch participants was completed soon after regulatory clearances.

We continue to qualify and move new controlled launch participants into our pipeline of planned onboarding being implemented by our growing direct sales team. The actual onboarding process for each controlled launch center begins with a comprehensive overview of the CellFX procedure and NPS technology for the entire staff.

This is a didactic session, which includes learning module covering mechanism of action, clinical applications, patient expectation management, local anesthetic administration techniques as well as operation of a CellFX System with a special emphasis on our e-commerce customer portal, enabled by the CellFX CloudConnect system that Darrin spoke about.

This onboarding process can take a full day for the physicians and their staff, which represents a significant investment for both Pulse and the practice to ensure that the user and patient experience is carefully managed.

Since there are no comparable technologies to NPS or to our nonthermal mechanism of action, we strive to have our commercial team present for the initial patient procedures and be present for diligent patient follow-up that is conducted after each CellFX procedure so that the physician can directly observe skin tissue changes that are inherent to the lesion clearance process, including observing the time it takes for the lesions to clear and how the healing process progresses over time. This direct observation of the lesion clearance and healing process helps the physician and their staff better describe the CellFX experience to future patients so that clear expectations can be set.

Since initiating our controlled launch in February, we have onboarded 15 clinics by the end of the first quarter. We continue to expect it will take clinics approximately 3 months to complete their initial 40-patient procedure commitment as established in the controlled launch protocol.

Imperative to this planned controlled launch process is taking feedback from the early controlled launch sites and their patients and applying this experience to newly onboard controlled launch sites.

Our Expectations Excels program provides formal patients and physician feedback data gathered during the controlled launch phase and uses that feedback to refine our educational content for future sessions with our controlled launch sites.

The major benefit of introducing a new paradigm-changing platform like CellFX with this carefully controlled and managed process in this early stage is that the early feedback and fine-tuning of the procedure experiences from these KOL experts greatly enhances our ability to deliver a consistent and predictable clinical and commercial outcome as we scale up our launch to the next wave of early adopters. Unlike the structure of a controlled clinical trial, a controlled commercial launch of new technology empowers expert physicians and their staff to optimize all aspects of managing the patient's experience.

In parallel with our controlled launch, our impressive and growing collection of peer-reviewed publications and major meeting podium presentations will continue to be critical in garnering the attention and potential purchasing interest of the next wave of early adopters. Discussion of NPS technology delivered by the CellFX System continues to have significant presence at major meetings of aesthetic procedure specialists. This enforces the broad applicability of our cell-specific nonthermal energy modality.

Notably, at the 2021 annual meeting of the American Society for Lasers in Medicine and Surgery, or ASLMS, 4 different podium presentations on NPS will be delivered by these notable key opinion leaders. First, Dr. Bruce Katz of New York City will present interim results on a multicenter feasibility study for the treatment of moderate to severe back acne.

Next, Dr. Joel Cohen of Denver, Colorado, will discuss our feasibility study for common nevi, generally known as moles. And Dr. Suzanne Kilmer of Sacramento will report on optimized energy settings in maintaining high efficacy and excellent skin recovery for sebaceous hyperplasia. And finally, Dr. Ted Lain of Austin, Texas, will present on the efficacy of clearing cutaneous nongenital warts with a single CellFX procedure.

Most recently, at the 2021 virtual meeting of the American Academy of Dermatology, Dr. Tom Rohrer, the current President of the ASLMS, presented consumer research with positive implications for the CellFX procedure. The research highlighted that aesthetic dermatology patients are highly motivated to seek a better and more durable solution for clearing common skin lesions and would place a higher value overall on a new procedure to clear lesions over other mainstream aesthetic procedures such as BOTOX or dermal fillers.

With our controlled launch being faithfully executed by our growing and highly trained aesthetic specialty sales teams and our parallel pursuit of new clinical data and applications, we will deliver the promise of the CellFX System as a multiple application platform that will be embraced around the world as we continue to advance our commercial launch plans as well as the new clinical applications that will feed our future commercial growth.

Thank you now. And I will turn the call over to Sandy.

Thank you, Ed. For the first quarter of 2021, operating expenses were $18.5 million compared to $12 million for the prior year period, an approximate $6.5 million increase year-over-year. Operating expenses for the 3 months ended March 31, 2021, included $7 million of noncash stock-based compensation versus $2.6 million in the prior year period, representing $4.3 million or 66% of the year-over-year increase in operating expenses. The additional year-over-year increase in operating expenses was primarily driven by the expansion of commercial and operational infrastructure, including increased headcount to support commercialization activity.

As I move into the discussion of our operating expenses, I'll focus my comments on our adjusted or non-GAAP results to provide insights into the underlying trends in our business. Please refer to today's press release for a detailed reconciliation of non-GAAP measures with the most comparable GAAP measures.

Research and development expenses consist of salaries and related expenses for manufacturing, research and development personnel as well as clinical trials and consulting costs related to the design, development and enhancement of our potential future products. Non-GAAP research and development expenses increased by approximately $600,000 to $5.9 million for the 3-month period ended March 31, 2021, from $5.3 million during the same period in 2020 primarily due to increases in personnel, facility-related costs in consulting and outside services in support of our FDA submissions and new application developments, all partially offset by reductions in clinical trial expenses, sponsored research, prototype material and devices, and travel expenses from a year ago.

We expect the incrementally elevated research and development expenses compared to the prior year period to remain at approximately these levels for the year as we continue to invest in the CellFX System application expansion initiatives Darrin previously discussed.

Sales and marketing expenses consist of salaries and related employee expenses for commercial personnel, including marketing and commercial operations as well as professional fees, trade shows, sponsorships and other promotional activities. Prior to receiving FDA clearance and CE Mark approval for the CellFX System, sales and marketing expenses were included in general and administrative operating expenses.

Non-GAAP sales and marketing expenses increased by approximately $1 million to $2.4 million for the 3-month period ended March 31, 2021, from $1.4 million during the same period in 2020, primarily related to increased personnel, consulting and outside services to support commercialization activities not conducted in 2020.

Sales and marketing expenses for the 3-month period, March 31, 2021, also included $135,000 of noncash expenses related to the controlled launch of the CellFX System. We expect sales and marketing expenses will continue to incrementally increase throughout the year as we invest in activities to support broad commercial operations, including the controlled launch of the CellFX System.

General and administrative expenses consist of salaries and related employee expenses for executive, finance, legal, human resources, information technology and administrative personnel as well as professional fees, patent fees and costs, insurance costs, and other general corporate expenses. Non-GAAP general administrative expenses increased by approximately $600,000 to $3 million for the 3-month period ended March 31, 2021, from $2.4 million during the same period in 2020 primarily related to increases in personnel, facility-related costs, legal, accounting, other public company expenses, and director and officers' insurance.

Non-GAAP net loss for the first quarter of 2021 was $11.4 million compared to a net loss of $9 million for the first quarter ended March 31, 2020. Cash, cash equivalents and investments totaled $59.9 million as of March 31, 2021, compared to $20.5 million as of December 31, 2020. Cash used in the first quarter of 2021 was $10.7 million, excluding net proceeds received under the at the market or ATM equity offering program, term loan and the exercise of warrants. On March 11, 2021, we strengthened our balance sheet through a $41 million term loan payable in June 2022.

We will continue to use our best discretion in authorizing distribution of shares under the ATM program. During the 3-month period ended March 31, 2021, we issued and sold 157,742 shares of common stock under the ATM. The shares were sold at an average price of $34.29 per share for aggregate net proceeds of approximately $5 million after deducting sales commissions and offering cost payable.

Cash usage will continue to increase incrementally as we invest in activities to support broad commercial operations, including building a commercial team in Europe, increasing inventory levels and conducting additional studies to support indication expansion with the FDA. Inventories were $1.1 million at March 31, 2021.

On the top line, revenue generation will begin as each controlled launch clinic completes their 40-patient commitment and elects to take ownership of the CellFX System. As such, incremental revenue-generating systems will come online throughout the year as systems are implemented at practices, and they complete initial procedures. We remain focused on our controlled launch strategy and its implementation through calculated investments to drive long-term adoption and growth.

Now I'll turn the call back to Darrin.

Thank you, Sandy. Over the past months, we have gained exciting momentum as a commercial organization. We're executing our strategy to achieve regulatory approvals, onboard KOLs as the initial controlled launch participants, all while growing a library of positive clinical data to support current and future CellFX System applications. This significant progress made by the Pulse Biosciences team is establishing a foundation from which we can drive widespread adoption and utilization of the CellFX System and NPS technology.

Joining me now for Q&A are Ed Ebbers, Executive Vice President and General Manager of Dermatology; and Sandy Gardiner, Executive Vice President and Chief Financial Officer. Operator, please open the call for questions.

(Operator Instructions) Our first question comes from Anthony Vendetti with Maxim Group.

I was just wondering on the 15 KOLs that are on board now, have you had any feedback in terms of the protocol or how the patients that are being treated by the 15 KOLs? Any update on that at this point? Or is it too early?

Anthony, it's Darrin. Yes, thanks for the question and for listening in. So yes, we had 15 by the end of the first quarter. So that was sort of roughly mid-February until the end of March, and then we've continued in this quarter. And I think overall, like you heard from Ed, and I'll let Ed jump in here in just a second. The feedback has been very positive in terms of the whole program, implementation of the training, getting physicians and their staff up to speed, initial treatments of patients. And I don't know if we mentioned in the script, but certainly, all of the installations have treated patients at this point and are moving forward. So it's been very positive. We're really pleased from an execution perspective, our ability to get systems out to the clinics, get them trained up and get them rolling. So I think thus far, it's been great. Ed, if you want to jump in and provide a little additional color there.

Yes. All I'll add to that is that it really is a collaborative process between us and the physicians that we asked to participate, and that was our understanding right from the beginning. While we certainly had very successful clinical trials, those are far different clinical conditions than one might encounter in everyday clinical practice in terms of a diversity of lesions, the diversity of patients, so we really continue to learn from them on a daily basis. And in some ways, they've added to our understanding of the wide range of potential lesions that we believe are treatable and they are treating in ways that we weren't able to evaluate in clinical trials because of the diversity of patients and lesions that they've allowed us to observe and get even steeper in our learning curve in terms of new lesions that we hadn't treated before.

Okay. Great. And then Ed, did you say another 30 or 40 by the end of the second quarter, so that you'll be at 45 to 55 in total by the end of the second quarter?

Yes. Yes, that's right, Anthony. So we had 15. And then as I mentioned, we'll probably be somewhere between, yes, 45 and 55 at the end of this second quarter, and then we'll finish it up in the third quarter in the U.S. and Europe.

Okay. That's helpful. And so sebaceous hyperplasia, by end of second quarter, it should be submitted to the FDA. And then did you say nongenital warts by the end of the year, by the end of 4Q '21?

Yes. So that's right. Sebaceous hyperplasia here in the next several weeks. We're just finishing up that 510(k). And then with cutaneous nongenital warts, we expect enrollment to be completed kind of late this quarter, early next. And then that puts us in, we think, good position to get the 510(k) and by the end of the year.

And then just an overall general question on revenues. I know these are out to the KOLS. So there's not a lot of near-term revenues because there's some -- they're going to be earning some of the ability to have the system by providing detailed feedback, but some revenue generation by the third quarter is still -- is that still feasible, reasonable at this point?

Anthony, this is Sandy. So they'll come online after they have finished, of course, their 40-patient commitment, but we continue to feel that revenue will be minimal in the first 3 quarters. It won't be until the fourth quarter that we would actually see after we complete the controlled launch systems and the process here. That's where we would expect additional commercial revenues.

Okay. And then in terms of commercialization, just to stay on that before I turn it back over, commercialization could happen in the fourth quarter where you roll it out beyond the KOLS if all the KOLs are onboarded by the end of the third quarter, correct?

That is correct.

Our next question comes from Sean Kang with H.C. Wainwright.

So my first question is regarding Canadian market. So first of all, how large is the -- how big is the Canadian market? And also, if you obtain the Canadian approval on time, would you expand your current controlled launch program to include Canada?

Yes. Let me touch on the first part. So yes, as I mentioned in the prepared remarks, we've been in this process with Health Canada to gain approval for the CellFX System. We think that, at this point, based on guidance documents from Health Canada that we have answered the final question, and we're in sort of the final stage of the review. So given that, we think the review will complete before the end of the quarter, just again, based on timing that is in sort of their standard guidance. So if we get an approval at that time, then yes, we would expect to expand our controlled launch program into Canada. It would be relatively small with regard to the additional number of clinics. I don't think we've settled on an exact number yet, but I think it would be relatively -- incrementally relatively small when compared to the U.S. and Europe. And in terms of sort of overall market, Ed, do you want to make any comments on that? In terms of Canada?

Yes. Yes, the rule of thumb is it's somewhere between 1/5 and 1/7 of the U.S. total in the aesthetic market. Now having said that, there's some very fine top key opinion leaders in Canada with whom we've already begun talking about their interest in participating. We've also hired a regional director based in Canada to manage those controlled launch sites with the same kind of high quality that we've come to expect in Europe and the U.S. So we're definitely locked and loaded and ready to roll with proven training programs, a well-trained person and physicians who are very enthusiastic about governance. We're very optimistic about our future in Canada.

I see. That's helpful. So one more question regarding the basal cell carcinoma study. So would you say -- would you share any data from the study before you go for the pivotal study?

Yes. Thanks, Sean. Well, we'll see when we get there. I mean, I think, our intention is always to be very open and transparent with our clinical data. It wouldn't, I think, surprise anybody who's followed us to see that we would have exposure to that data in scientific meetings, if applicable, and so we would certainly look for opportunities to do that. Now this is an FDA IDE-approved study. So we have to be respectful of how we use that data, both with FDA for that pivotal study and the public release of it. But I think we've always tried to get our clinical data out in scientific meetings as we're able as that data gets finalized and as those meetings come around and our investigators desire to publish some of that information. So I think you can expect for us to get that data out just as soon as we're able to do that.

And I think -- I didn't talk about it much during the prepared remarks, but we're very pleased. Now this is our third IDE-approved study with FDA. So I think it's a demonstration that we have a good collaboration with FDA. And these studies, I think, as we sequence them through FDA and get their good collaboration and sort of agreement on these studies, we're able to go from a couple of benign lesions, as you know, with sebaceous hyperplasia and cutaneous nongenital warts and now to something that is nonbenign and to get FDA's approval for that study, we think, is a real feather in our cap and speaks very highly of our team of the CellFX System and our technology and our ability to work with FDA on advancing this technology further into the clinic. So we're very pleased to be moving forward in this particular indication.

There are no further questions at this time. I'd like to turn the floor back over to management for any closing remarks.

Yes. Thank you very much, operator, and thank you, everybody, for joining us on this very important update call. We're excited about where we are today with our controlled launch and getting the CellFX System out into aesthetic dermatologists' hands. We very much appreciate all of the support that we've received from all of our stakeholders, and we continue to move forward on our strategy and get the CellFX System out into more and more applications. So thank you very much. Look forward to talking to you all soon.

Ladies and gentlemen, this concludes today's web conference. You may now disconnect your lines at this time. Thank you for your participation, and have a great day.