10-Q: Pulse Biosciences Q2 Loss Widens Amid R&D Surge

Pulse Biosciences reported a significant increase in net loss for Q2 2025 and H1 2025, driven by higher research and development and general and administrative expenses, despite advancing its novel nsPFA technology in cardiology and soft tissue ablation.

Summary

• Net loss for the three months ended June 30, 2025, increased to $19.168 million, up from $11.383 million for the same period in 2024.
• Net loss for the six months ended June 30, 2025, increased to $35.963 million, up from $21.520 million for the same period in 2024.
• Research and development expenses rose to $12.088 million in Q2 2025 from $7.230 million in Q2 2024, and to $22.401 million in H1 2025 from $13.971 million in H1 2024.
• General and administrative expenses increased to $8.187 million in Q2 2025 from $4.496 million in Q2 2024, and to $15.918 million in H1 2025 from $8.370 million in H1 2024.
• No product revenues were generated for any periods presented.
• Cash and cash equivalents stood at $106.349 million as of June 30, 2025, down from $118.038 million at December 31, 2024.
• Net cash used in operating activities for the six months ended June 30, 2025, was $26.328 million, compared to $18.175 million for the same period in 2024.
• The company received $14.0 million in gross proceeds from exercises of 2024 Rights Offering Warrants during H1 2025, contributing to $14.807 million in net cash provided by financing activities.
• Cumulatively, $63.5 million in gross proceeds have been received from exercises of the 2024 Rights Offering Warrants as of June 30, 2025.
• The company received FDA 510(k) clearance for its nsPFA Percutaneous Electrode System in March 2024 and for a second size of the needle in August 2024.
• The nsPFA Cardiac Surgery System received FDA Breakthrough Device Designation in July 2024 and was enrolled in the FDA's Total Product Life Cycle (TPLC) Advisory Program (TAP).

Sentiment

Score: 6

Explanation: The sentiment is moderately positive. While the company continues to incur significant and increasing losses with no revenue, it is making substantial clinical and regulatory progress in high-potential medical markets (AF, soft tissue ablation) with its differentiated nsPFA technology. Key positive indicators include FDA 510(k) clearances, Breakthrough Device Designation, and enrollment in the TPLC Advisory Program, which signal strong potential and regulatory support. The company also maintains a healthy cash balance, deemed sufficient for the next 12 months, and has a history of successful capital raises, albeit with associated dilution. The long-term growth prospects are promising, but current financial performance reflects the early, capital-intensive development stage.

Positives

• Received FDA 510(k) clearance for the nsPFA Percutaneous Electrode System in March 2024 for soft tissue ablation in percutaneous and intraoperative surgical procedures.
• Obtained FDA 510(k) clearance for a second size of the percutaneous electrode needle in August 2024, providing additional treatment options for customers.
• Clinicians in the pilot program for percutaneous electrodes have completed over 140 patient procedures, indicating early adoption and evaluation.
• Preclinical and early clinical testing results for nsPFA cardiac products (surgical ablation clamp and endocardial ablation catheter) have exceeded expectations, with encouraging acute and remapping data.
• The nsPFA Cardiac Clamp achieved transmural ablations in less than two seconds in preclinical studies, demonstrating potential speed advantages over thermal modalities.
• The nsPFA technology's nonthermal mechanism avoids char formation and appears to spare acellular tissue (vessels, valves, nerves) from permanent damage, suggesting significant safety advantages.
• Received FDA Breakthrough Device Designation in July 2024 for the nsPFA Cardiac Surgery System for the treatment of Atrial Fibrillation, which expedites development and review.
• Enrolled in the FDA's Total Product Life Cycle (TPLC) Advisory Program (TAP) for the Cardiac Surgery System, further facilitating rapid development and review.
• Maintained a strong cash and cash equivalents balance of $106.349 million as of June 30, 2025, which is believed to be sufficient for at least the next twelve months.
• Successfully raised $14.0 million in gross proceeds from warrant exercises during the first six months of 2025, demonstrating continued investor support and liquidity from prior capital raises.

Negatives

• Reported no product revenues for the threeand six-month periods ended June 30, 2025, and 2024, indicating a lack of commercial sales generation.
• Net loss significantly widened to $19.168 million for Q2 2025 (from $11.383 million in Q2 2024) and to $35.963 million for H1 2025 (from $21.520 million in H1 2024), reflecting increased operating expenses.
• Research and development expenses increased substantially by $4.9 million in Q2 2025 and $8.4 million in H1 2025 year-over-year, contributing to higher losses.
• General and administrative expenses also saw significant increases, rising by $3.7 million in Q2 2025 and $7.5 million in H1 2025 year-over-year.
• Net cash used in operating activities increased to $26.328 million for H1 2025 from $18.175 million for H1 2024, indicating a higher cash burn rate.
• Accumulated deficit grew to $426.463 million as of June 30, 2025, from $390.500 million at December 31, 2024, reflecting ongoing losses.
• No stock-based compensation expense was recognized for certain market and performance-based options because the probability of achieving the performance conditions was not met as of June 30, 2025.
• The company ceased all commercial sales and marketing operations in dermatology in September 2022, indicating a pivot away from a previously commercialized application due to lack of success.
• The business is entirely dependent on one family of products (CellFX System) and one platform technology (Nano-pulse Stimulation), increasing concentration risk.
• The company has very limited experience commercializing products in its new focus areas, posing a challenge for market adoption and revenue generation.

Risks

• Need to obtain additional funding to finance operations and complete product development and commercialization; risk of restricting operations or delaying/eliminating product development if not obtained.
• Heavy dependence on the success of Nano-pulse Stimulation (NPS) technology; risk of significant financial losses if unable to successfully develop and commercialize.
• Limited commercialization experience and history of significant losses; expectation of continued losses for several years and may never generate profits.
• Future capital raises may result in further dilution to investors or incur indebtedness, potentially impairing liquidity.
• Medical device development and commercialization is a complex, time-consuming, and expensive process with a high rate of failure.
• No assurance that clinical product candidates (AF, Cardiac Clamp, Catheter) will obtain regulatory approval or that clinical study results will be favorable.
• Limited sales and marketing experience; no assurance devices will be adopted by surgeons or other physicians.
• Regulatory requirements and timelines may affect the scope and timeline of trials and the potential market, including significant delays.
• Intense competition, rapid technological changes, new product introductions, and evolving industry standards; risk of obsolescence if new products/enhancements are not timely.
• Commercialization could be delayed or prevented by unforeseen events in clinical trials.
• Failure of clinical trials to demonstrate safety and effectiveness could lead to additional costs, delays, or inability to complete development.
• Substantial competition from well-established manufacturers with greater financial, technical, research, and marketing resources.
• Pursuit of business development opportunities (acquisitions/collaborations) may not achieve intended results, increase outstanding shares, result in a change of control, or incur material indebtedness.
• Substantial regulatory and legislative uncertainty regarding pricing, reimbursement practices, or other healthcare initiatives.
• Potential for costly legal claims, particularly related to product liability and intellectual property infringement.
• Trade tariffs and changes at the U.S. FDA may adversely affect operating costs and timelines.
• Subject to U.S. and foreign anti-corruption, anti-money laundering, export control, sanctions, and other trade laws and regulations; serious consequences for violations.
• Reliance on patents to protect technology; risk of inability to protect intellectual property rights or liability for infringing others' rights.
• Risk of adverse consequences from compromised information technology systems or data, including regulatory investigations, litigation, fines, and business disruptions.
• Future success depends on retaining chief executive officers and other key executives and attracting, retaining, and motivating qualified personnel.
• Majority stockholder (Robert W. Duggan, ~72% voting power) limits the ability of others to influence director elections and other transactions, creating potential for conflicts of interest.
• Substantial future sales of common stock in the public market, or the perception of such sales, could cause the stock price to decline significantly.
• Stock price may be volatile and fluctuate substantially, resulting in losses for stockholders.
• Limited liquidity of stock due to concentrated ownership by the Co-Chairman.
• Product candidates may cause serious adverse side effects or have other properties that could delay/prevent regulatory approval or limit commercial desirability.
• Clinical development is a lengthy and expensive process with uncertain outcomes; earlier results may not be predictive of future trial results.
• Long-term growth depends on developing marketable products for AF, tumors, and nodules; failure could lead to scaling back or discontinuing operations.
• Interim top-line and preliminary clinical trial results may change as more patient data become available and are subject to audit and verification.
• Failure to maintain necessary regulatory clearance for products, or delays/denials of clearances/approvals for future devices and indications.
• Mechanism of action of NPS technology platform has not been fully determined or validated, potentially hindering regulatory approvals or partnerships.
• Difficulty enrolling patients in clinical trials could delay or prevent product candidate development.
• Laboratory conditions differ from commercial and field conditions; safety and effectiveness may depend on user technique.
• Issues with firmware and software may negatively affect device function.
• Inability to protect the confidentiality of proprietary information and know-how.
• Inability to protect intellectual property rights throughout the world.
• Failure to obtain an adequate level of reimbursement by Medicare and other third-party payers.
• Ability to utilize net operating loss carryforwards and certain other tax attributes may be limited.
• Substantial amount of goodwill and intangible assets which may have to be written down.
• Reduction in force to reduce operating expenses may not result in anticipated savings or could disrupt business.
• Reliance on third parties for sales, marketing, manufacturing, and/or distribution activities; these third parties may not perform satisfactorily.
• Disruptions in the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to review products.
• Need to maintain strong working relationships with physicians; failure to comply with laws governing these relationships could harm business.
• Exposure to risk of misconduct or other illegal activity by employees, collaborators, and other personnel, including noncompliance with regulatory standards and insider trading.
• Subject to environmental regulations; failure to comply could result in significant liabilities.
• Could be negatively impacted by actual or perceived violations of applicable anti-corruption law or internal policies.
• Incurring costs as a result of operating as a public company and management devoting substantial time to public company compliance initiatives.
• As a smaller reporting company, reduced disclosure requirements may make common stock less attractive to investors.
• No plans to pay dividends for the foreseeable future.
• Anti-takeover provisions in charter documents and under Delaware law could make an acquisition more difficult.
• Unfavorable global economic or political conditions could adversely affect business, financial condition, or results of operations.
• Risk of material weaknesses in internal control over financial reporting in the future.
• If interpretations, estimates, or judgments used to prepare financial statements prove incorrect, investor confidence could decline.
• Involvement in litigation may materially adversely affect the company.
• Facilities in California are located near known earthquake faults, posing a risk of damage and operational disruption.

Future Outlook

The company expects to pursue additional clinical evidenced-based milestones throughout 2025 for its percutaneous electrodes and plans to commence a clinical trial in Q3 2025 to support planned commercialization in H2 2025 for benign thyroid nodules. For its cardiac surgical program, the company expects to begin a pivotal clinical trial for the cardiac surgical clamp for Atrial Fibrillation in the next few months and commence a U.S. IDE pivotal clinical study for its 360 Cardiac Catheter in the next few months, anticipating PMA approval will be needed for U.S. marketing. The company believes its existing cash and cash equivalents are sufficient for at least the next twelve months but plans to raise additional capital in the future, potentially through equity offerings, debt financings, or new collaborations. It may also seek partnership opportunities for additional applications of its nsPFA/NPS technology.

Management Comments

• Paul A. LaViolette (President and CEO) and Jon Skinner (Chief Financial Officer) certified that the Quarterly Report does not contain any untrue statement of a material fact or omit to state a material fact, and that the financial statements fairly present the financial condition, results of operations, and cash flows.
• Management stated, "Based on our preclinical experience and the potential to significantly improve outcomes for patients in a large and growing market, we decided in 2022 to focus our primary efforts on the use of nsPFA energy and the CellFX platform in the treatment of atrial fibrillation ("AF") and in a select few other markets where it could have a profound positive impact on healthcare for both patients and providers, such as surgical soft tissue ablation."
• Regarding the nsPFA Percutaneous Electrode System, management noted, "Having secured 510(k) clearance to market and sell the nsPFA Percutaneous Electrode System in the United States with different sizes of percutaneous electrode needles, we have engaged with experts in the field of soft tissue ablation to gather information that will help shape our future commercial endeavors."
• Management highlighted the progress in the pilot program for percutaneous electrodes, stating, "To date, the clinicians in our pilot program have completed more than 140 patient procedures."
• On cardiac products, management commented, "The results of preclinical and clinical testing of both our nsPFA cardiac products, namely our surgical ablation clamp and our endocardial ablation catheter, have exceeded our expectations and initial data have been presented at physician and industry conferences."
• Management believes, "Our nsPFA technology can provide important advantages over todays thermal modalities in creating these ablation lines."
• Preclinical studies showed the nsPFA Cardiac Clamp "consistently achieved transmural ablations in less than two seconds, independent of tissue type or thickness."
• Management emphasized, "We believe these advantages will be important to cardiac surgeons, so we are working with leaders in the field to develop this technology quickly."
• Regarding the cardiac catheter, management stated, "We believe our endocardial catheter ablation device will have many of the same advantages that the surgical ablation clamp appears to have with respect to both performance and safety compared to standard thermal modalities."
• Management believes, "nsPFA technology, which delivers pulses of electrical energy that are each less than a millionth of a second long, can offer similar safety advantages as PFA and may provide improved efficacy advantages based on the circumferential design of our catheter and because it appears nsPFA technology can create deeper ablations."
• Management reiterated its broader belief that "nsPFA ablation, as well as NPS technology more broadly, has the potential to provide superior outcomes across a variety of medical disciplines and we may seek partnership opportunities to develop additional applications."
• On liquidity, management stated, "We believe that our existing cash and cash equivalents will be sufficient to fund our projected operating requirements for at least the next twelve months from the filing date of this Quarterly Report on Form 10-Q."

Industry Context

Pulse Biosciences operates in the highly competitive and rapidly evolving medical device industry, specifically focusing on novel ablation technologies. The company's strategic pivot to cardiology, particularly Atrial Fibrillation (AF) treatment, targets a large and growing market with an estimated 43 million people affected worldwide. Its Nano-pulse Stimulation (NPS) technology, or Nanosecond Pulsed-Field Ablation (nsPFA), aims to differentiate itself from established thermal ablation modalities (radiofrequency, cryoablation) and micro-PFA used by major competitors like Abbott Laboratories, AtriCure, Inc., Boston Scientific Corporation, Johnson & Johnson (Biosense Webster), and Medtronic plc. The company highlights potential advantages such as nonthermal ablation, faster procedure times, ability to ablate through thicker tissue, avoidance of char formation, and sparing of acellular tissue (vessels, nerves). The FDA's Breakthrough Device Designation and enrollment in the TPLC Advisory Program for its Cardiac Surgery System underscore the potential for significant innovation in the field, despite the company's early commercialization stage and the substantial resources of its competitors.

Comparison to Industry Standards

• The company's nsPFA technology is positioned as a potentially superior alternative to current thermal ablation modalities (e.g., radiofrequency ablation, cryoablation) and micro-PFA used by competitors such as Abbott Laboratories, AtriCure, Inc., Boston Scientific Corporation, Johnson & Johnson (Biosense Webster), and Medtronic plc.
• Preclinical studies of the nsPFA Cardiac Clamp demonstrated transmural ablations in less than two seconds, which is presented as a significant speed advantage over existing thermal modalities.
• Unlike thermal ablation, nsPFA's nonthermal mechanism is claimed to avoid char formation on electrode surfaces, a common issue that can lead to gaps in ablation lines and treatment failure with current methods.
• NsPFA technology is highlighted for its ability to ablate near and into vessels and valves without concern of permanent damage, as it does not impact acellular tissue like collagen or cartilage, offering a safety advantage over thermal modalities.
• The technology has also been shown to spare nerves of permanent damage, even when treated directly, addressing another concern associated with thermal ablation procedures.
• The CellFX nsPFA 360 Cardiac Catheter is designed to provide a circumferential ablation in a single treatment cycle, aiming for faster treatment times compared to current thermal modalities, especially around pulmonary veins.
• The company suggests nsPFA technology may provide improved efficacy advantages over micro-PFA due to its ability to create deeper ablations.
• The FDA's Breakthrough Device Designation for the nsPFA Cardiac Surgery System and its enrollment in the TPLC Advisory Program indicate regulatory recognition of its potential to provide more effective treatment compared to existing options, suggesting it meets a high bar for innovation and public health importance.

Corporate Governance

Legal Proceedings

• The company is not presently a party to any legal proceedings that, in management's opinion, could have a material adverse effect on its results of operations or financial condition.
• The company acknowledges that it may be involved in various legal proceedings arising in the ordinary course of business, which could have an adverse impact due to defense and settlement costs, diversion of management resources, negative publicity, and reputational harm.

Related Party Transactions

• Robert W. Duggan, the company's majority stockholder and Co-Chairman, purchased approximately 88% of the units offered through the 2024 Rights Offering, which closed on July 3, 2024, and generated $60 million in gross proceeds.
• In June 2022, Mr. Duggan purchased approximately 56% of the shares offered through a common stock rights offering, which raised $15.0 million.
• In September 2022, Mr. Duggan lent the company $65.0 million, which was subsequently terminated in April 2023 when the loan principal and approximately $0.2 million in accrued interest were converted into equity.
• Three of the company's directors, including Mr. Duggan and Manmeet Soni (Lead Independent Director and Audit Committee Chairman), are executives at Summit Therapeutics Inc., another company in which Mr. Duggan holds a controlling equity interest.
• The company engaged outside legal counsel to represent the company, even though the same legal counsel currently represents Mr. Duggan personally in other matters, including certain related party transactions.

Stakeholder Impact

• **Shareholders**: Face significant dilution risk from future capital raises, limited influence on corporate governance due to majority ownership by Robert Duggan, and potential conflicts of interest from related party transactions. The stock price is highly volatile, and there are no plans for dividends.
• **Employees**: Subject to potential headcount reductions to manage operating expenses, which could lead to attrition. The company's success depends on retaining key management and attracting skilled scientific and technical personnel in a competitive talent market.
• **Customers (Physicians/Surgeons)**: Require education and training on the CellFX System and nsPFA technology. Adoption rates are uncertain and depend on factors like perceived benefits, reimbursement, and clinical data. Misuse could lead to unsatisfactory patient outcomes.
• **Patients**: Stand to benefit from potentially improved treatment outcomes for Atrial Fibrillation and soft tissue ablation if nsPFA technology proves safe and effective. However, they face risks of serious adverse side effects from new medical devices and the inherent uncertainties of clinical trials.
• **Suppliers/Creditors**: The company's reliance on third-party suppliers for critical components exposes them to supply chain risks. Creditors face risks associated with the company's ongoing operating losses and its dependence on future financing to meet cash requirements.

Next Steps

• Pursue more clinical evidenced-based milestones throughout 2025 for evaluating the early pilot commercialization of percutaneous electrodes.
• Commence a clinical trial in Q3 2025 to support planned commercialization during H2 2025 of the nsPFA Percutaneous Electrode System in the United States as a treatment for benign thyroid nodules.
• Begin pivotal clinical trial of the cardiac surgical clamp for Atrial Fibrillation in the next few months.
• Commence a U.S. IDE pivotal clinical study of the 360 Cardiac Catheter sometime in the next few months.
• Seek PMA approval from the FDA to market and sell the cardiac catheter in the United States.
• Plan to raise additional capital in the future to fund operations.
• Increase the shares available in the 2017 Plan via a stockholder vote at the next annual stockholder's meeting.
• Reassess the probability of performance conditions for market and performance-based options at each reporting period.

Key Dates

Recommendation

Pulse Biosciences is at a pivotal stage, demonstrating strong clinical and regulatory momentum with its innovative nsPFA technology in high-growth medical fields like Atrial Fibrillation and soft tissue ablation. The FDA's Breakthrough Device Designation and TAP enrollment are significant positive signals, indicating the technology's potential to address unmet medical needs. However, the company's financial performance shows increasing losses and a high cash burn rate, with no current revenue generation. While the existing cash position is adequate for the next 12 months, future capital raises are inevitable and will likely result in further shareholder dilution. The investment carries substantial risk due to the early commercialization phase, intense competition from well-established players, and the inherent uncertainties of medical device development. A 'Hold' recommendation is appropriate, acknowledging the promising long-term potential driven by technological advancements and regulatory progress, while cautioning investors about the significant financial challenges and execution risks that remain.

Keywords

Nano-pulse Stimulation, nsPFA, Atrial Fibrillation, Cardiac Ablation, Soft Tissue Ablation, Medical Device, CellFX System, Percutaneous Electrode, Cardiac Clamp, Cardiac Catheter, FDA Clearance, Breakthrough Device Designation, Clinical Trials, Biotechnology, Healthcare Innovation, SEC Filing, 10-Q, Financial Results