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Greetings, and welcome to the ClearPoint Neuro, Inc.'s Second Quarter 2025 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. Comments made on this call may include statements that are forward-looking within the meaning of securities laws. These forward-looking statements may include, without limitation, statements related to anticipated industry trends, the company's plans, prospects and strategies, both preliminary and projected, the size of total addressable markets or the market opportunity for the company's products and services, the company's expectation for future development, regulatory approval and the market for cell and gene therapies and the anticipated adoption of the company's products and services for use in the delivery of gene and cell therapies and management's expectations, beliefs, estimates or projections regarding future revenue, results of operations or the adequacy of cash and cash equivalent balances to support operations and meet future obligations. Actual results or trends could differ materially. The company undertakes no obligation to revise forward-looking statements for new information or future events. For more information, please refer to the company's annual report on Form 10-K for the year ended December 31, 2024, and the company's quarterly report on Form 10-Q for the 3 months ended March 31, 2025, both of which have been filed with the Securities and Exchange Commission, and the company's quarterly report on Form 10-Q for the 3 months ended June 30, 2025, which the company intends to file with the Securities and Exchange Commission on or before August 14, 2025. All the company's filings may be obtained from the SEC or the company's website at www.clearpointneuro.com. It is now my pleasure to turn the call over to Joe Burnett, Chief Executive Officer. Please go ahead.

Thank you, Danilo. The team has continued to deliver strong results here in the second quarter, both financially and strategically. From a financial perspective, we achieved record revenue, benefiting from sales contributions across all 4 of our growth pillars. Strategically, we were able to achieve key milestones that give us confidence that we will see continued growth across our entire portfolio. This is an exciting phase for the company, which, again, we've called Fast. Forward. It's exciting because we now have multiple growth vectors taking shape all at the same time. These various vectors include: the expansion into the operating room using both MRI and CT, the expansion into the laser therapy and access market, the expansion of regulatory clearances into new geographies, the addition of multiple new biopharma partners, the addition of new products and services to offer those biopharma partners, the expansion of our site capacity for larger preclinical and GLP studies, and the progression of pharma partners into larger Phase III clinical trials and eventual commercialization of these new-to-world cell and gene therapies. All of this is taking place against the backdrop of our strongest cash position in years and the confidence to use that capital to move each and every one of these growth vectors forward. As always, let's dig a bit deeper into this progress with regard to our 4 growth pillars. Starting with pillar number one, biologics and drug delivery. Our strategy once again is to extend our lead in cell and gene therapy delivery. Our biologics and drug delivery team continue to support more than 60 active partners in the biopharma space at all phases of development, including preclinical testing, clinical trial execution and even global commercialization. We have successfully entered a long-term lease for our new expanded preclinical research facility and began construction late in the second quarter in preparation of adding capacity and offering new capabilities to our network of biopharma partners. We believe that this expanded facility in Torrey Pines, California, will be operational here in the second half of 2025. In addition, numerous partners have enrolled patients in global regulatory trials, including those partners who have been accepted into one of the FDA expedited review programs. In the second quarter, we submitted our 510(k) for the SmartFlow Cannula for use with REGENXBIO gene therapy RGX-121. This submission is once again a cross-labeled combination product is being reviewed in parallel with the REGENXBIO BLA, which the company announced was accepted by the FDA for review. RGX-121 is intended for use in children with MPS II, also known as Hunter syndrome. The PDUFA date is scheduled for November of this year. Another one of our partners, Solid Biosciences, has also communicated that they have earned expedited review status by the FDA and will begin renewed clinical strategy discussions with the FDA in support of an eventual BLA submission to treat another debilitating disease called Friedreich's ataxia, which is estimated to impact more than 5,000 patients in the United States alone. This brings the total number of ClearPoint neuro-related programs that have been accepted to the FDA expedited review up to 9. In addition, the ICD-10 Coordination and Maintenance Committee has included new neuro infusion-specific ICD-10-PCS codes, which will be effective October 1, 2025, and will assist in tracking commercial use of the SmartFlow Cannula and eventually other device technologies directly to the brain. ClearPoint submitted the application for these new codes earlier this year. We also announced a record number of cell and gene therapy infusions in July performed either commercially or as part of registered clinical trials, including 17 global patients treated across 11 different drug platforms. This demonstrates the continued progression of our more than 60 active partners through the regulatory approval process. We believe that additional cell and gene therapy platforms with significantly underserved patient populations have the potential to be approved within the next 2 to 3 years. ClearPoint Neuro has established or is actively collaborating with multiple partners to establish commercial supply agreements to ensure readiness for the launch of these new therapies. Next, let's talk about pillars number two and number three, which today represent neurosurgery navigation and laser ablation. Our goal for this segment is to introduce new products that are not only precise and accurate, but are also fast, simple and predictable so that we can help hospitals increase throughput and create capacity for these future drug delivery patients. This segment saw our single-use consumables grow 33% in the second quarter, primarily driven by the introduction of our new 3.0 operating room navigation software and gains in laser ablation market share with our PRISM Laser Therapy system. The 3.0 navigation software has been very well received during the first 3 months since FDA clearance, and the products moved into full market release here in the second quarter. This has been the fastest technology deployment in our history. And as of today, the 3.0 navigation software is already available in 35 new or existing sites here in the United States. The product is delivering on our promise of fast, simple, predictable procedures and the early clinical performance is combining accuracy with efficiency as seen in the data collected during our limited market release. So far, we have seen average radial errors less than 1 millimeter and average skin-to-skin procedure times of around 2 hours even for bilateral deep brain stimulation procedures. This is all despite the fact that these cases were often the very first experience for these surgeons with our operating room product, and we expect additional time savings with workflow familiarity and optimization. Yet again, this efficiency is being achieved without sacrificing accuracy and precision. Also impressive was that the cumulative radiation dose of these efficient bilateral procedures was less than that of a single full diagnostic head scan. One of the surgeons even commented that with this level of efficiency and predictability, it would be possible to schedule 3 surgeries in a single day. Another exciting theme was the early release of 3.0 surrounds the clear and unique flexibility of the system to work in both the MRI suite and in the operating room. In the second quarter, we had multiple examples where the preplanning for the surgery had taken place inside the ClearPoint software. However, the MRI magnet went down with the patient ready for surgery. In years past, the patient may have been sent home or treated with another operating room navigation system, meaning ClearPoint would have lost the case. In these examples, the ClearPoint procedure simply pivoted out of the MRI and into the operating room, leveraging all of the preplanning and preparation that had already taken place. These are cases that ClearPoint does not have to lose anymore when an issue arises with the MRI magnet. Similarly, our PRISM Laser Therapy system workflow got a boost with the new 3.0 software, making planning and imaging more compatible with both the ClearPoint navigation system and other common workflows like robotics. We have made gains in market share despite being limited to only 3.0 Tesla-powered scanners, which we estimate represents about 1/2 of the available market today. We have since submitted the data required by the FDA to achieve compatibility with 1.5 Tesla scanners and expect to have access to the other half of the market sometime in the second half of this year. Our laser therapy case volumes continue to increase. And after 1 year of full market release, we estimate to have achieved between 5% and 10% of the neuro laser therapy market here in the United States. And finally, moving to our fourth pillar of achieving global scale, we continue to make significant progress expanding our installed base and hospital support infrastructure as well as pursuing global regulatory clearances. In the second quarter, we activated 2 additional new sites. As mentioned last quarter, our priorities in the first half of 2025 have been executing the 3.0 and PRISM launches at existing accounts where we already have familiarity, specialist coverage and customer service enabled. In the second half, we plan to once again accelerate new site activations here in the U.S. We continue to expect total 2025 activations to be between 15 and 20 new sites, which would equate to between 11 and 16 new sites activated here in the second half. For perspective, we have already added 2 additional sites here in the third quarter and still have 7 weeks to go in Q3. At present, we have approximately 30 potential customers in our near-term capital funnel, which we believe have a chance to activate before the end of the year, and we estimate that we can activate about half of those targets by December 31 and the rest in 2026. ClearPoint currently has regulatory clearances supporting 36 countries around the world, and this does not include additional countries where the regulatory approval process has been initiated, including Canada, Japan and China. The global reach is another significant sales tool that helps ClearPoint extend our lead in drug delivery as this expansive global product placement is yet another significant barrier to have to replicate. Our operating expense growth in the quarter mirrored our revenue growth with an operating burn almost identical to Q2 of 2024. As a management team, we will continue to balance scalable financial performance with the appropriate investments required to build a moat around ClearPoint as the gold standard for neuro cell and gene therapy delivery. Our plan is to continue to extend our lead and be responsive to our active pharma partners who again are telling us that it's time to get ready. With that, I would like to open up the call to any questions.

[Operator Instructions] Our first question today is coming from Frank Takkinen from Lake Street Capital Markets.

I was hoping maybe I could start with some more color around the biologic partner opportunity. Clearly, you're making good progress across the board there. I was hoping you could refresh us more on kind of revenue contribution from KEBILIDI and how that may work into the model? And then a second part to that, just thoughts around uniQure, what should we be looking for in the back half of the year in advance of that? I think it's a Q1 2026 decision date that is expected.

Yes. Yes, happy to -- thanks for the question, Frank. This very -- the first 2 opportunities that I think we have, one being KEBILIDI here in the United States and globally for that matter, as well as the REGENXBIO platform, which could be approved later this year. Those are still incredibly rare single gene mutation disorders that have very, very great results when it comes to being treated with this type of therapy, but are very, very small and remote patient populations. It's possible that these populations are underdiagnosed, meaning that once awareness is created that there's a treatment out there that more and more patients may get the blood test done to confirm if they have one of them. However, from a modeling standpoint, we do not see those as massive revenue drivers in the near term. If anything, they're symbolic and very important milestones to kind of prepare us as we enter hospitals, as we work with pharmacy, as we make sure the pharmacists have the equipment to file these drugs appropriately. So it's kind of like a dress rehearsal for some of the larger market opportunities that follow, the first of which are an important one of which that you just mentioned being uniQure and their treatment for Huntington's disease. So to put things in perspective, these first 2 rare disorders, the number of patients around the world are measured in the tens or maybe the hundreds compared to something like Huntington's disease, where it's estimated there's 70,000 patients in Europe and sort of Western Europe and the United States alone. And these are the patients that are actually in their 30s and 40 years old that have become symptomatics. That's not even counting the 130,000 estimated patients that are carriers of the Huntington's gene that would still be -- end up being candidates, but maybe are not symptomatic yet. So the scale, obviously, is significantly higher for something like uniQure in their particular disease state. The other thing to consider when you think about Huntington's disease as being the next large opportunity for us is that it's sort of a race for these patients to get treated as quickly as they can. The 2-year data that uniQure has presented showed a halt in the progression or relative halt in the progression, meaning you're not necessarily restoring function that you've lost, but you're kind of stopping it from getting worse. So as a patient, if you hear that, you think to yourself, wow, I don't want to wait 6 months or a year where the disease continues to progress and then we halt it. I want to get this done as quickly as we possibly can. So one of the things that we're working with hospital centers and regional treatment centers right now is to, again, find this extra capacity so we could add 1,000, 2,000, 5,000 additional patients as quickly as we possibly can to be able to kind of open the gates and make this happen. To put that in perspective, it's not a daunting number. You think about 5,000 and what it would take. The math behind that is you need 20 hospitals or 20 academic centers that are each capable of having a ClearPoint room that does 1 procedure a day. So 20 hospitals times 1 procedure a day gets you to that 5,000 number. So we're not talking about an incredibly heavy lift, but it is time for these hospitals to start thinking about it because it's getting a lot closer. And then as far as some of the other programs that are in expedited review, including Friedreich's ataxia, frontal temporal lobe dementia, Parkinson's disease, epilepsy, et cetera, those are all represent significantly larger opportunities than again, these rare childhood disorders that we're working with today.

Got it. That's very helpful. And then maybe on ClearPoint 3.0, it sounds like you're having strong receptivity to that as well. Where do you stand in maybe rolling it out to the rest of the installed base? And maybe any metrics you can provide around the contribution that this has driven to the model and the margin impact of that would be great to understand.

Yes. So I don't -- as of today, I don't believe there's any margin impact. So it's still a very profitable procedure to us. The capital component is significantly less. So if you think about a new hospital that wants to start using ClearPoint for the first time, but maybe historically, they didn't have access to an MRI magnet. The only piece of capital they need is the ClearPoint workstation and the ClearPoint software. You don't have to purchase titanium instruments. You don't need new head coils, you don't need an MRI monitor. So the lift to get that in is significantly less, and it allows us to start using the disposables or consumables right away, which again, those margins are very much in line with the MRI ones. In fact, it's the exact same MRI kit that now is labeled with both MRI and CT compatibility. So from an inventory standpoint, a hospital can carry that one product on their shelf and do an MRI case one day and a CT case the next day with that same car level inventory. So that's been very well received. I would say, I think we have 35 is what we announced, 35 sites that now have the 3.0 or 3.01 software installed. And of those sites, I believe there's 21 or 22 that have already done procedures. So again, it's our -- kind of our fastest deployment that we've ever seen. And again, we're also targeting these very high-volume academic centers so that we can increase -- move -- maybe move some of their DBS procedures out of the MRI and into the operating room with this product so that, again, we're creating capacity for these clinical trials of drug delivery and eventually the commercial cases as well.

Next question is coming from Anderson Schock from B. Riley Securities.

Congrats on all the progress.

Thank you.

Yes. So first, on your cell and gene therapy partners, will all these therapies be delivered under live MRI? Or can they also be delivered in the OR under CT guidance?

Yes, I would say it depends. So not all of them will be done under live MRI guidance. And it's important to recognize that there's a number of different products in our ecosystem that we're selling into these procedures. right? You've got the cannula itself. So this is the route of the administration, which is touching the blood of the patient. It's touching the drug. It has very, very precise and controlled and studied flow rates, viscosity rates, et cetera. So all of those things are crucial. What we have seen so far is that the combination devices group at the FDA or other notified bodies have seemed to establish that they plan to approve the drugs and the cannula as combination products. So what I mean by that is if you look across those 60 partners, our expectation is that pretty much all 60 of them would be using ClearPoint technology at least in the form of the cannula, which likely would be approved as a combination device. So that's one element of what we provide. The others are, I think, a little bit more technology and location dependent. So we have some of those partners who really want to maintain control of the surgical process. I think most pharma companies recognize that one of the biggest risks that we have here is to not only get approval for the drug, but once the drug is approved, to make sure that we don't go too fast and too loose here, where 1 or 2 surgeons that are using a specific technique can potentially cause a disruption for the entire market because they don't get the results and for a drug that could cost hundreds of thousands, maybe even millions, insurance companies are going to ask a lot of questions if they've paid for these procedures and they're not getting the results that they expect. So there are many of our partners that have said, "Hey, at launch, we want to have as detailed a surgically controlled process as we can." And that comes often with the ClearPoint MRI guidance because you don't only have the consistency of ClearPoint preplanning and software and hardware during the procedure. But again, you can actually see the drug being infused and it becomes an important part of the quality control process, right? So that is one element. And I'd say a good portion -- I don't want to put a percentage on it, but it's -- many of our partners, at least at this stage, are planning to use some form of MRI guidance with ClearPoint. There are, however, additional partners who maybe don't feel that they need the MRI guidance right out of the gate or they want to study the ability to do it within the MRI in one subset and in the operating room with another subset. And most commonly, it's not gene therapy programs, it's cell therapy programs where you're injecting fewer -- a lot less volume. So it's harder to see the infusion on MRI, in which case, if you're not getting as detailed a quality control sort of measurement at the very end of that, then maybe the speed of being able to do it in the operating room is a little bit more appropriate. So we really have a mix, but these companies are our partners not just for navigation, they're for the cannula, they're for our clinical support, they're for our preclinical research that we do, they're for our GLP capabilities that we're adding, they're for our predictive modeling software. So even if someone chooses not to use the navigation portion of the portfolio, there's still many other products that are certainly being reviewed and could potentially be sources of revenue.

Okay. Got it. That's helpful. So I guess with the majority -- it sounds like the majority will be using MRI guidance. I guess, how should we think about the bottlenecks of MRI suite availability and how that will impact the launch of these therapies?

Yes. It's kind of what I was mentioning around Frank's question as well is how do we create the capacity inside of the MRI scanner. So one key approach for us is to do exactly that, to create faster, more efficient procedures in the operating room today that still allow a hospital and a team to be familiar with ClearPoint. So as a quick reminder, if you're using the ClearPoint software in the operating room, it is the same hardware and the same software as you would use in the MRI. So every case that you're doing today in the operating room your entire team is practicing for what that procedure is going to be like in the future in the MRI using drug delivery. So it's kind of like a proving ground. It's a way to increase hospital proficiency and to streamline those procedures where a typical MRI procedure in the past might be 3 hours. As I mentioned on this call, we're getting it down to 2 hours here in the operating room. If someone does 100 of those procedures, can we get down to 1 hour or 90 minutes or something like that. So improving efficiency to not only create more MRI time and operating room time, but also more physician capacity to do the procedures is one key element. Another key element is the expansion of MRI capabilities. I mean there are absolutely more MRIs being installed. Siemens, for example, has a Free.Max system, which is a half Tesla magnet that is much easier to install in the hospital. There's much -- a lot less shielding required. We have done all of our preliminary testing on this kind of next-generation lower-cost magnet. And it gives us all the confidence that we need that we can perform ClearPoint procedures in that. So in the future, if you're building out a new wing of a hospital to do these types of things, it's possible and practical to have these sort of lower power, lower-cost magnets that still can perform what we would need them to do. So that's another element where these launches and these kind of big iron companies are sort of listening to this need as well. And then the third one is to say, well, how do we make sure that if we treat a patient in the operating room without MRI guidance that we can still give them the best possible chance for success. And this is everything we're doing with our AI platforms, including Maestro, including our partnership with New England Scientific in biophysical modeling, where we can actually take our predictive model of our software compare it directly to the actual results of the MRI-guided procedures that are used in the clinical trials. And if we can show that the model, in fact, predicts with a very high correspondence of what the drug did in those first 100 patients as part of the clinical trial, then you can actually say, "Hey, yes, we can do it in the operating room, because we understand where the drug is going to spread." Provided we still get that sub-millimeter accuracy that we do with ClearPoint. So there's kind of 3 different ways we're working right now to go ahead and expand the capacity and make sure the MRI itself is not a bottleneck.

Okay. Got it. That's very helpful. And then do you have any updates on the timing of GLP compliance at your expanded preclinical research facility?

I think we'll have a good sense of that pretty quickly. So I'm not ready to commit to the GLP portion. It's possible that we could do our first GLP study this year, but I think it's going to be kind of close if it happens December time frame or in Q1 of next year. But what I would say is we've hired the people required. And now we are really just getting the facility and getting the quality system for this new facility up and running so that it meets all the necessary accreditations to be doing this kind of preclinical work.

Thank you. We reached the end of our question-and-answer session. I'd like to turn the floor back over for any further or closing comments.

Well, thanks again to everyone for joining today's call. We have spent the last 10 years building a strong foundation. And in 2025 is where we hit the fast forward button to get the market ready for this exciting future of cell and gene therapy. We are very excited to be in a position where we can directly impact many patient lives, often being in the room for the very first patient ever treated with these new technologies. Good night, and thank you for your attention.