Greetings, and welcome to the ClearPoint Neuro, Inc. First Quarter 2024 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 market or the market opportunity for the company's products and services 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, 2023, which has been filed with the Securities and Exchange Commission and the company's quarterly report on Form 10-Q for the 3 months ended March 31, 2024, which the company intends to file within the Securities and Exchange Commission on or before May 15, 2024. 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 introduce your host, Joe Burnett, Chief Executive Officer. Thank you, Joe. You may begin.

Thank you, and thank you to all of the investors and analysts on today's call for being a part of the ClearPoint Vision and journey. Our mission and our priority is to help restore quality of life to patients and their families who are suffering from some of the most debilitating neurological disorders imaginable. In the first quarter of 2024, we have continued to make progress across our 4-pillar growth strategy, including biologics and drug delivery, functional neurosurgery navigation, therapy and access products and in achieving global scale. In 2024, we expect meaningful contributions from not just one, but from all 4 of these growth pillars as we launch new products and services throughout the year. These new products will allow us to expand into the operating room, expand into laser therapy, expand internationally and expand into more comprehensive preclinical and clinical trial services as many of our biologics and drug delivery partners progress through the regulatory process and begin first-in-human clinical trials for their therapy. I will now turn the call over to Danilo, our CFO, to review our financial performance in the quarter after which I will add some detail to our 4-pillar growth strategy. Danilo? Danilo D’Alessandro: Thank you, Joe, and thank you all for joining us today. Looking at the first quarter 2024 results. Total revenue was $7.6 million for the 3 months ended March 31, 2024, and $5.4 million for the 3 months ended March 31, 2023, which represents 41% growth versus the first quarter of 2023. Our revenue is made up of 3 components: Biologics and drug delivery, functional neurosurgery navigation and therapy and capital equipment and software. Biologics and drug delivery revenue include sales of disposable products and services related to customer-sponsored preclinical and clinical trials utilizing our products. Biologics and drug delivery…

Thanks, Danilo. 2024 is off to a great start for ClearPoint as we have made significant progress toward both financial operating goals as well as strategic product and partnership goals that will benefit the company in 2024 and beyond. This year, we have the potential to grow along a number of different investors at the same time. This opportunity is a result of the multiple investments we have made into the team and to the portfolio, all of which will start to gain steam this year. These 2024 growth opportunities include: number one, adding new hospitals and research centers to our installed base at an accelerated rate. Number two, expanding our navigation offering into the operating room, where more than 95% of all procedures take place. Number three, increasing same-store sales with the SmartFrame OR and the PRISM Laser Therapy system, complementing our MRI-guided system with our existing customers. Number four, adding new preclinical and clinical trial services to our biologics and drug delivery portfolio, and number five, participating in the progression of our biotech partners as they move beyond benchtop and preclinical and into first-in-human clinical trials. As a result, we expect all of our segments to contribute meaningful double-digit growth to the company in 2024. We continue to expect revenue for the year in the range of $28 million to $32 million, and as already mentioned, we started the year strong with growth of 41% here in Q1. Thus again, breaks that progress down into our 4 growth pillars. First, our biologics and drug delivery business, which is our largest segment, continued to perform and grew 61% in the first quarter. Our core ClearPoint Navigation system and software and our SmartFlow cannulas continue to be the leading guidance and infusion technology for gene and cell therapy due to…

We'll now be conducting a question-and-answer session. [Operator Instructions]. Our first question is from Frank Takkinen with Lake Street Capital Markets.

Congrats on the solid start to the year. I wanted to start with one around the guidance. Obviously, you have too a really strong start. If you just think about the midpoint, you've got 25% of that already in the bag. Typically, we see you guys grow sequentially as you advance some of your different pipeline assets, partner revenues, new products launching, et cetera. I was curious on how you were thinking about keeping the guidance range versus maybe increasing the low end of it or increasing the midpoint, given the strong start to the year?

Sure. Thanks for the question, Frank. Yes, at this point, we're still early into the year. I don't think we're in a position to change the guidance. One reason is the early start, there's always things that can happen in the second half of the year. And number two, a big part of our growth here in Q1 came from kind of a nonrecurring capital component, which was a great start to the year, but we don't fully expect $1.4 million in capital sales every single quarter. It will likely be less than that in the quarters ahead. So that capital has to be replaced by something else. And in our case, we think very strongly, it's going to be replaced by the disposable flow of PRISM Lasers and SmartFrame OR and traditional MRI navigation disposables which, again, like I just said, are going to kick in Q2. But at this point, it kind of remains to be seen, how strong the actual capital sales will be in the closing part of the year. So we're going to keep guidance where it is for right now.

Got it. And then kind of segues into my second question, a 2-parter. First, on the [ 8 ] activations, obviously, a significant uptick versus prior years. Anything specific to call out? Was it just pent-up demand, maybe new products starting to spur excitement in activating sites? And then as the second part to that, how should we think about the scale-up process as those sites are scaled and how can they contribute to the back half of the year?

Yes. No, I think the good news is it's not one thing. It's actually demand coming from a few different locations. In some cases, it's a pharmaceutical company that is approached a hospital that would like to participate in a trial and they need access to ClearPoint. So that's one driver that we've seen in the first quarter of the year. Another one is our more comprehensive offering now that we can offer in the same package, not only navigation, but also navigation and laser therapy, which is relatively new from an offering standpoint. So we've seen that be the driver for a couple of these placements. And then also the expansion in the operating room, the ability to get some experience with ClearPoint without necessarily having to have access to an MRI magnet, which is what a lot of users have always wanted to do. And we simply have not had a solution for them in the past and we saw that here in Q1 as well. So those are the 3 primary drivers, I would say, that are leading to these early placements, and I think very much will continue the balance of the year. As for the second question, the scale-up process, most of these things can happen pretty quickly. So of those 8 placements, there was probably modest revenue in Q1, but certainly within 3 months into Q2 is when we would expect that ramp up, which kind of comes in 2 different phases. The first phase can be the initial cases that are used either during the evaluation or the permanent placement, which are just ordered sort of as they go. And then once a hospital figures out how many and how often they are going to use the ClearPoint system, it's not uncommon that they would purchase a stocking or a par level quantity that they keep on the shelf, which gives us a little boost as far as getting maybe 3 or 4 cases on the shelf as opposed to just going case by case. So there's a little bit of an accelerator that happens maybe 3 to 6 months after the install takes place. So that disposable line that we just mentioned, we're expecting that to go from an 18% decline to a double-digit growth here in Q2. So I think we'll see a meaningful turnaround in that part of the business.

[Operator Instructions]. Our next question is from William Wood with B. Riley Securities.

Appreciate you taking my questions, and congratulations on the very nice start to 2024. So I'm just trying to think -- yes, and so just trying to think in terms of the existing new customers digging in a little bit just to the last question. When you have a new customer come in, how often do you see them sort of starting with 1 product and then expanding into additional projects, services or capital services. I mean, is it -- do you -- is the expansion into a multi-product service user typical? Or is it more that people stay with sort of one.

I'd say it's very common that they move on to other indications. I would say traditional deep brain stimulation navigation is generally where they start. And that's a nice entry point because it's a pretty predictable procedure, but it's also a procedure that many patients have anxiety over and the thought of being able to look at a live MRI image to guide the procedure and that the patient could be asleep instead of awake for that procedure, is generally a very attractive starting point for a hospital. We then see them move in a couple of different directions. One could be doing additional DBS type procedures. So instead of treating essential tremor or Parkinson's disease, they might move on to using DBS to treat epilepsy, which is generally a new procedure and a new target and sometimes a new surgeon at the hospital itself. In other instances, the next step they take is to go into laser ablation where you might have a functional neurosurgeon using laser ablation to treat epilepsy. Or you might have a neuro-oncologist using laser ablation to treat tumor. So there's a couple of different directions that it can go there. And then finally, which is something that's not always in control of the surgeon, but more in control of the chair of the hospital or the research center or some pharma and biotech companies is to take this early experience using ClearPoint for laser, for DBS, for tumor, for epilepsy and saying that, "Yes, I'm now at site that has significant ClearPoint experience and I'm ready to be considered for enrollment in these more advanced clinical trials for cell and gene therapy that are coming down the road. We have to remember that about 90%, 95% of the workflow is identical between a gene therapy infusion as a DBS procedure. So every one of these clinical procedures we're doing today is really preparing and training a site to be capable of doing clinical trial cases in the future, which is kind of another draw on where the technology goes from.

Got it. Yes, that's very helpful. Kind of sticking in that same vein, I mean, you had a lot of growth in the BDD revenue, which is largely based on the disposable and services related to preclinical and clinical as you were just kind of discussing. In that preclinical use and maybe even the clinical, do you feel that the growth in that disposable and services, is that related to larger studies getting underway or more studies or partners beginning to use your products? So is it more partnerships or just more general use?

Yes. I think of it more as the progression of the maturity of these different cell and gene therapy candidates. So what I mean by that is generally, in your first engagement with the customer, we might do a little bit of prototyping, we might test compatibility, but there's not a big revenue opportunity for us in year 1. You start to compare that to year 2, year 3 and year 4, then we start saying, "Okay, now we're doing repeatability testing, now we're doing toxicology testing and flow control studies and things like that," any of which sometimes could be 15, 20 as many as 50 different navigation systems and cannulas that are used in some of these studies. So as a customer continues to make progress on their drugs, generally, the revenue opportunity for us continues to expand as well. So I would say -- to kind of answer your question, I would say of that growth that we saw here in Q1, the majority of that is existing customers that are progressing in their drug development with the addition of a number of new customers as well or new partners, that just started their very first engagement with ClearPoint. So it's a combination, but it's definitely heavily weighted towards existing customers and their progression.

There are no further questions at this time. I'd like to hand the floor back over to Joe Burnett for any closing comments.

Once again, thank you to everyone interested and being a part of our team and our journey here at ClearPoint. As we showed in Q1, we believe 2024 is going to be an exciting year as we earn new customers, grow same-store sales with new product launches and solidify important strategic partnerships with new and existing biotech partners. We expect to impact significantly more lives this year than in years past and we are thrilled to work at a company, which can impact so many patients in so many different ways. Thank you and good night.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.