Pulmonx at Canaccord Conference: Growth Plans Amid Challenges

On Tuesday, 12 August 2025, Pulmonx Corp (NASDAQ:LUNG) presented at Canaccord Genuity’s 45th Annual Growth Conference, outlining its growth strategy and addressing revised revenue forecasts. While the company sees potential in its Zephyr valve treatment, slower adoption in the US has impacted revenue guidance, highlighting both opportunities and challenges.

Key Takeaways

• Pulmonx revised its revenue guidance to $90 million to $92 million, reflecting a 7% to 10% growth, down from previous expectations.
• US market initiatives, such as direct-to-patient advertising and AI-powered patient identification, are progressing slower than anticipated.
• International markets like Japan and China are performing well, with expansion plans underway.
• Pulmonx has a strong cash position of $84.2 million and is focusing on cost efficiencies and operational improvements.

Financial Results

• Q2 revenue reached $23.9 million, with $14.7 million from the US and $9.1 million from other regions.
• Gross margins for Q2 stood at 72%, with a full-year target of 74%.
• The company holds $84.2 million in cash, cash equivalents, and marketable securities.
• Last year’s revenue growth was 22%, indicating a slowdown this year.

Operational Updates

• Direct-to-patient advertising accounts for 30% of treated patients but is hampered by longer sales cycles.
• LungTrax Detect faces delays due to hospital legal and security reviews.
• Therapy awareness specialists have increased STRATX activity by 19% in certain areas.
• Pulmonx plans to launch about 12 new accounts each quarter.

International Expansion

• A post-approval study in Japan is ongoing, with a broader launch planned after completion.
• China shows growth potential, supported by strong distributor partnerships.

Pipeline Development

• The Aeroseal product, targeting collateral ventilation, is expected to launch in 2028, following trial completion and FDA approval.

Future Outlook

• Pulmonx aims to acquire new patients through direct advertising and peer-to-peer education.
• The company is optimizing procedures and expanding its market with the Aeroseal product.
• A $12 billion total addressable market presents long-term growth opportunities.

Q&A Highlights

• Discussions focused on the delay of US market initiatives and their impact on revenue.
• The effectiveness of direct advertising and therapy awareness specialists was analyzed.
• STRATX activity was discussed as an indicator of future revenue.

For more details, refer to the full conference call transcript.

Full transcript - Canaccord Genuity’s 45th Annual Growth Conference:

John Young, Medical Technology Analyst, Canaccord: Canaccord’s forty fifth annual global growth conference. I’m John Young, one of the medical technology analysts here. Excited to have pulmonics with us, and with us is Steve Williamson, CEO, and Meihi Yoshi, CFO. With that, let Steve begin with an overview of the business and then move to q and a.

Steve Williamson, CEO, Pulmonics: Thanks, John. I appreciate you having us here. I’m Steve Williamson. As John said, we look forward to this conference every year, and thanks to Canaccord for having us. These are our forward looking statements.

If you would like to get more, you can go to our website and check out the 10 k, and our full investor deck is there. I’m gonna take a couple minutes to walk you through kind of a high level overview of Pulmonics and talk to you a little bit about some of the programs that we’re working on and actually show you how the product works. I think it’s kinda interesting if you guys get a look at at what happens and what we’re doing with the product. The investment highlights for you are already captured on this slide. We’ve got a $12,000,000,000 TAM.

I’ll walk through what that breakdown looks like. About 5,000,000,000 of that’s in The United States, about 7,000,000,000 outside The United States. We believe we validated that TAM as well, and I’ll talk you through some of the programs that have done that. We’re broadly reimbursed across the world. We’ve got great reimbursement across US, Europe, and Australia.

Accepted, we’re in grade a evidence in the gold COPD guidelines. So we are the standard of care for patients with severe emphysema. We’ve got a strong pipeline and team. Our team has been here for we have centuries of experience. I’ve got people that have been pulmonary for their whole lives that are their whole working lives at work for us.

They’ve really worked their way up, we’ve got exceptional relationships with the key opinion leaders in the space. Clinical results. We have four randomized controlled trials and over 150 pieces of published data. If you look at a company that’s at our stage, you typically won’t see that much clinical data that’s in place. These valves are proven and because of those clinical results, that is why we’re in the gold guidelines.

It’s a precision treatment. We’ve got a strong patent portfolio and it’s minimally invasive. So this is done through a bronchoscope. There’s no incisions made. Very minimally invasive and beneficial for the patients.

Emphysema is a big burden. You know, you think when I came on board when I was talking to the people at the company, it was like, well, these people have difficulty breathing and you think that it’s difficulty for them to inhale. Actually, happens is they end up with hyperinflation of a lobe of their lungs. They have too much air that’s trapped in their their lungs. So liters of air, imagine a liter of Coke or a two liter bottle of Coke trapped in your lungs.

What that does is that air can’t escape. It shuts down your thoracic cavity and makes it so that the healthy parts of your lung can’t expand and bring new air in to perfuse and give you the energy that you need and oxygenate your blood. So as you can’t get a good deep breath, you get decreased activity and this starts a downward spiral for these patients. It gets worse and worse as they do less activity, they they have a negative progression, they their exercise capacity goes down, they end up with more breathlessness, less activity, and it keeps going and going and going. We had somebody at our national sales meeting came in, said it took her three hours to put her pants on.

It was that difficult. They can’t walk out to the mailbox. They can’t go to the kids baseball game. They can’t really do anything. And so it’s a huge, huge negative progression here.

COPD is the number four cause of death worldwide. I believe there are one point five million patients with severe emphysema in The US. And again, I’ll talk about that in a couple of slides. Treatment for these patients, typically medical management. This is typically used through inhalers that treat inflammation.

Patients will go through and exhaust medical management options. They’ll also go through pulmonary rehabilitation to try to strengthen and stop this downward progression. That’s on the left hand side. Most of the patients that end up with Zephyr valves have already exhausted what’s on the left hand side. It’s not a long term solution for them.

If you imagine these airways have collapsed and a pill is not gonna be able to keep those airways open. You need a mechanical solution and that’s what we provide. If you look on the right side, you’ve got long volume reduction surgery where they’ll go in and actually remove that lobe of the lung. What we’re doing is shutting it down. They’ll actually surgically remove it.

It’s a very invasive surgery. There’s probably four hundred to five hundred of these done a year, so it’s not done very often. Very, very highly invasive and also a big risk for these patients that are not very healthy. So it’s difficult for them to go through a major surgery like that. Or lung transplant, again four to five hundred patients in this space are treated with lung transplant.

Many of them actually are bridged to lung transplant with Zephyr valves. Zephyr valves are in the middle, obviously minimally invasive, I’ll walk you through a procedure here in a second, but done through a bronchoscope. If you look at our market opportunity, talked about $12,000,000,000 We’ve got three point eight million patients in The US that are diagnosed with emphysema. As you break that down, one point five million have severe emphysema. From that, one point two million actually have hyperinflation which is that expanded lobe of the lungs that we go in and we actually allow it to deflate and the rest of the lungs to expand.

And then of that one point two million, we believe there are five hundred thousand are CV negative patients which mean they don’t have any secondary collateral ventilation is what CV is. So if they have collateral ventilation that allows air to go between the lobes of the lungs. So there’s five hundred thousand patients out there that don’t have this collateral ventilation, that don’t have other exclusionary comorbidities. On average for our calculation here, we assume about $10,000 per procedure. On average there’s about four valves placed in each patient.

ASP on a valve is about $2,500 I’ll walk you through how the procedure works. This is what the product looks like. It looks huge on the screen right now but it’s the size of about a pencil eraser. And if we walk through, you’ll see it’s a silicone valve inside a structured stent. Here the patient’s gonna go, and we’re gonna actually treat this patient’s right upper lobe.

You’ll see this large lobe in the top left of your screen. This patient has severe hyperinflation. They’ll go through, he’ll put in three valves into this patient, deploys the valve. What that does is it allows air to escape from the lobe, allows air to come out but not air to go back in. So it’s a one way valve that shuts down.

You’ll see as the valves get in place, they allow all the air to escape from that hyperinflated lobe. No more air can get into it. The air then goes into the other areas of the lung. You’ll see that the other areas of the lung expand here and that hyperinflated lobe shrinks down significantly. That’s atelectasis, that’s what they’re looking for, this very diseased, destructed part of the lung shuts down.

All the red healthy tissue in the other areas of the lung expand, they can get oxygen. Now this patient can breathe, they can go out, they can move, and as they move, you have a reversal of that progression. Now these patients can go out, they can walk. As they walk, they get better, they can walk further. They can go to events, they can do a number of different things.

So this is the way that the product works. As we come in, we look at three different ways to grow our market. So if you look overall, you’ve got a product that really, as I walked you through the clinical data support it, the gold guidelines support it, there’s a good strong economic and clinical value proposition for the product. What do we do to grow a market like this? How do we make this business bigger?

We focus in three different areas. Our strategy is acquire, test and treat. We want to acquire new patients. We do that through a number of different avenues. Direct to patient advertising is one.

We do I’ll I’ll talk a little bit more about that later, but direct to patient advertising where we go in and we do a lot of digital, but we also do connected TV, and we’ll also do more broader band standard TV, but in targeted markets where we know that we have large treating centers. Peer to peer education, doctors talking to doctors is always a great way to get product across. We do significant amounts of peer to peer education or rubber chicken dinners as they’re known. LungTrax Detect is a product that we brought to market. This product actually goes into the PACS system of the hospital, looks at low dose chest CTs, takes that CT scan, scans it with AI, and identifies patients that are in the existing PAC system that have severe radiographic emphysema.

So you’ve got patients that are already in that hospital system. We pull out of the PAC system. A lot of these patients come in for lung nodule screening, something that’s very big in the pulmonary space right now. About fifteen percent overlap where the patients that come in for lung nodules are actually identified with severe radiographic emphysema. LungTrax Detect is a new product that we brought out to market.

We really launched it. We went through a pilot in the back half of last year, but really launched it to our sales force in the first quarter of this year. We’re starting to see some pickup in Q2 and expect that to be a growth driver for us in the future. Therapy awareness specialists. We’ve identified a number of patients through our direct to patient advertising.

This year we’ll have over a million people will hit our website, but 70,000 patients will come onto our website and take a quiz on their breathlessness, or they’ll actually call and talk to a respiratory therapist that works for us. 70,000 patients will do that. What typically happens after that is a lot of time they’ll want to go talk to their referring physician. There are over 20,000 pulmonologists in The United States right now. Less than 30% of them know about valves and know to refer those patients.

So we have to educate that pulmonology community on valves. We do that through peer to peer education. We also brought on what we call therapy awareness specialists. Their job is strictly to go out and educate these physicians, these pulmonologists, community pulmonologists, 20,000 of them, to go out and educate them on, valve treatment and who local treaters are and where they should send their patients if they have these patients that are potential candidates. So, that’s how we acquire patients.

Once those patients are acquired and they make it to that treating center, there’s a testing protocol that they have to go through. We’re doing everything we can to make that testing protocol extremely efficient. There’s ways that we can do that. We’ve partnered with virtual navigators who can actually manage the patient through that process. We have a product I talked about, LungTrax Detect, that actually goes into the PAC system.

LungTrax Connect actually is just a workflow that comes back for that hospital to work up that patient as they’re identified as a potential candidate here. Administration is something that we started selling to recently. We’re starting to sell to the C suite and leaders of different groups. And talking about the importance of building a lung health program, Lung health partnership programs really are what are in our discussions now where you see a lot of these hospitals will create lung cancer screening or, well, it’s typically lung cancer screening, we’ll go in and talk to them about, you’ve made investments in lung cancer, why wouldn’t you broaden that? Why wouldn’t you go after a larger group and have a lung health screening program?

You’ve already made the investment, why not reap the benefits of treating a much bigger patient population that’s in your market right now that does not have any options, that’s literally suffocating in silence? Why wouldn’t you wanna treat those and actually get the benefits from that? So the administrative sale is something that we’ve been really working on over the last couple quarters. Then new account launches. We continue to bring on about 12 new accounts a quarter, we’ll continue to see that as we go forward.

Treating more patients. What can we do to treat more patients? We do that through geographic expansion right now. We’ve got both Japan and China. We have a post approval study that’s going on in Japan right now.

It’s 140 patients we have to do. Once we do that, we’ve already got approval. We just submit that to the government, we can go and launch more broadly. China is a big growing market for us and continues to grow. We use a distributor there, we’ve got a great relationship with them.

They’ve done a lot to expand their commercial footprint. The overall TAM expansion, I talked about collateral ventilation. I didn’t talk a lot about it. But what that is is when there’s airflow between the lobes of the lung, 20 to 25% of the time when a patient comes in to get our procedure, twenty to twenty five percent of the time they wake up and they’re told you can’t have the procedure because you have collateral ventilation. So when we have this Aeroseal product, which we expect to launch, we expect to complete our PMA trial in approximately the ’26, and then we’ll have a six month follow-up, and then we launch six months after, or hopefully six months after, as we get FDA approval.

That’s really a way for us to expand this TAM here. We literally have twenty to twenty five percent of the patients are already on the table. They’ve already gone through everything on the left hand side of this. Now we’re just gonna consent them to both when they go down. If you’re collateral ventilation positive, you’ll get Aerosene.

If you’re collateral ventilation negative, you’ll get valves. If you get Aerosene, come back a couple quarters later, a couple months later, and get valve treatment. So that’s a big long term growth driver for us. Again, we expect that to be approved in approximately the ’27 and would expect revenue of 28 there. And then procedure optimization.

We’re doing a number of different things to optimize the procedure for our customers. As you look at our financials, these are our financials last year. We grew 22%. Right now, revenue in Q2 was 23,900,000.0. The US is 14,700,000.0 of that, OUS 9.1.

Our margins are 72% in second quarter. Our guidance for gross margins for the year is 74%. Our margins were slightly depressed in the first two quarters as we had significant orders coming in from the distributor markets. And our cash position, we’ve got $84,200,000 in cash, cash equivalents and marketable securities. And that’s the financial review.

John Young, Medical Technology Analyst, Canaccord: Thanks, Steve, for that overview. I I think we’ll start on guidance and the revision after Q2. I think that’s and The U. S. Business, I think that’s really been the focus of most investors since the conference call.

The company is now projecting revenue of $90,000,000 to $92,000,000 for this year, implying growth of 7% to 10%. Can we just talk about The U. S. Market and the delay of initiatives? And I say delay here because I think that is the key word.

You made it very clear on your prepared remarks that you’re starting to see the initiatives that you highlighted today starting to work, but they’re just taking more time than anticipated. Maybe we could just work through what is working, what is not working in The U. S. Market, maybe starting with one tracks detect, and and also maybe identifying any friction point that you’re really seeing that you think you could overcome or or have plans to overcome too.

Steve Williamson, CEO, Pulmonics: Yeah. Great. If you if you look at the initiatives that we’ve talked about, they are working. They are they’re taking a little bit longer as you said, which I think were my words. So, yeah.

We’re seeing they’re taking a little bit longer. Let let me just start with, like, direct to patient advertising is probably the first place to go. So we know that thirty percent of the patients that have been treated in the first half of the year actually originally hit us through a DTP, engagement. So we’ll have, as I said, 70,000 patients will will come through and actually take a quiz or or, talk to our our respiratory therapist hotline. So, thirty percent of the patients that were actually treated had come through that channel.

So we know that that that that works, that that we are reaching patients, that we’re we’re we’re able to to contact them, and and and they’re they’re getting information, they’re making it through the pathway. I think as you as you look at, as we continue to grow that, we’re gonna continue to grow it in different ways, but but just the fact that we see them going through is is something that that bodes well for the future there. I think as we look at the DTP patients, though, it takes them a little bit longer to get through our funnel than a patient that’s identified at a pulmonologist’s office directly. And there’s a couple reasons for that. They have to go and they gotta talk to their pulmonologist.

Sometimes they wanna talk to a family member. There’s just a longer cycle there. And so I think that takes probably three to four quarters for those patients to actually make it through the funnel. And so, again, it’s taking a little bit longer than we originally expected it would take those patients to come through. If you look at LungTrax Detect, we did a pilot of this, and in the first couple of sites that we went to, the first site made it through, the the legal review, made it through their security review, and had patients scheduled and treated within a short period of time, like a couple of months.

And so when we were looking at LungTrax Detect, I thought, well, jeez, this is great. If we see this kind of adoption and this speed, then then we should see rapid growth as we come out and we launch this. So we launched it in in late January, as I said, kinda trained the sales force up in February, started selling it in the second quarter. We have numerous we we’ve got a good strong pipeline of customers that we’re working on with this, but the customers it’s bigger hospitals. And bigger hospitals take longer time to get through their legal, to get through their security reviews.

We’ll go in the security review. We’ll come back. They’ll give us a 12 page document that we have to answer, you know, and it’s everything about your your system. The good thing is that we use a gateway that that most hospitals already have, so we haven’t had any problem getting through these. It’s just the back and forth and the time it takes.

So once those once those accounts come on board, typically, it can take longer to see those patients come to fruition because now you’re identifying patients. Maybe this person was in a car accident. You know, their pulmonologist doesn’t even know that they had emphysema, so that can take longer. However, that said, our largest account that came on board with this last month, they found five patients, and have them in workup right away within the first month. And they they moved quickly through the process.

So it’s a bit of bit of a guessing game for us as to where it’s exactly gonna land. But as we’re seeing, it looks like it’s it’s another quarter or so delayed, and and so that’s why we changed the guidance.

John Young, Medical Technology Analyst, Canaccord: Got it. And do you guys have a a fair bit of visibility through Stradex? And that’s the initial part of the pipeline where patients have to get scanned to really kick off this whole cadence. What are you seeing today Stratix activity broadly in the business? And also to relate to the therapy awareness specialists that you’ve hired, I know have a 19% bump in those regions.

So, maybe compare and contrast what you’re seeing broadly today in the business, STRAX activity, and that 19% bump that you’re seeing in those areas where you’ve installed those specialists.

Steve Williamson, CEO, Pulmonics: Yeah. So, overall, we saw record STRATX in June and July. So, STRATX is basically the road map that we give the physician that tells them exactly how to treat these patients, that show them well, it doesn’t tell them how to treat it. It shows them exactly where this patient’s, would would best benefit, where the destruction is, what they have for hyperinflation. And it’s a road map for that patient so that they can determine exactly where they wanna put the valves, and the patient’s gonna have the best outcome.

Stratix is a leading indicator for us. Typically, a stratix comes into us and and a hospital or a doctor has sent it into us, and we give them this road map, I mean, we’ll typically see a a 50% ish, conversion rate on that. So if we’ve got that, it’s a leading indicator for us. In June and July, we saw record stratics. Now part of that record was driven by LUNTRACS DETECT.

So we had a number of stratics that came in from LUNTRACS DETECT, but we also saw an increase in these areas where we put the therapy awareness specialists. And that’s really their job, is to go in there and talk to these community pulmonologists, educate them on pulmonics, educate them on BLVR, and hopefully find these patients, help them find patients that are already in their, practice that could benefit from this. And so we’ll manage closely what the Stratix relationship looks like. To your point, we saw a 19% increase in those territories. They were hired in May, so it’s it’s early look, and I don’t wanna get over my skis on that one, but but it bodes well.

It’s it’s good for us to see from a from an initial standpoint.

John Young, Medical Technology Analyst, Canaccord: And, traditionally, when you see those increases in June and July extract activity, how long does that take to flow through to a revenue generating case in general? Like, could we see a bump by Q4? I know you just kind of talked about quarter delay possibly. Do you think by Q4 we could see some of these U. S.

Initiatives at least materialize then?

Steve Williamson, CEO, Pulmonics: Yeah. I I would hope so. And and so that’s that’s when we gave the guidance. That’s what we were looking for. You know?

It was we wanna give guidance that everything doesn’t have to land jelly side up for us to hit the numbers. But if we can if we can see the benefit and see these start paying off and the timing aligns now where we’ve got the direct to patient advertising, we’ve got the TASes, we’ve got LungTrax detect, all these things start coming together, and we see a little bit more benefit on that, then then, yeah, we would like to we would we would hope to see that in the back half of the year.

John Young, Medical Technology Analyst, Canaccord: And between those three programs, my understanding is most of it’s still very targeted smaller efforts, more or less, between the therapy awareness reps, I think you have eight, seven. The direct to patient, I also think it’s pretty small and targeted today as well. Is there a point where you’d lean into any of these and really start accelerating adoption? By Q4, could you actually get enough data to make that decision?

Steve Williamson, CEO, Pulmonics: Yeah. We’ve already leaned into direct to patient just based on the number of patients that we see coming through. I think, as I said, it’s validated the TAM, and so we we’ve leaned into that. And then it’s okay. Where’s the next where’s the next hurdle that we need to get?

Well, that’s with the COPD physician. Okay. So now we put the the tassels out there to get the COPD physician. What’s next? Okay.

Now we gotta get them through the patient workup. Okay. We’ve got LungTraxConnect to get them through the workup. We’ve got a virtual navigator partnership to get them through the workup, And then let’s make sure that they have the time in the OR Suite because we’ve talked to the administrators and shown them that this is a good program.

John Young, Medical Technology Analyst, Canaccord: And, Steve, I know your background is commercial and leading sales organizations. I wanna ask you, what are you hearing from your Salesforce now, especially after the q two call, and the focus in The US? I’m just curious what you’re hearing from the ground.

Steve Williamson, CEO, Pulmonics: Well, so so the OUS Salesforce is is fine. They there’s there’s no, they’re they’re they’re doing great, and it’s it’s, was at their sales meeting, and and everybody is really fired up. They’ve got a number of initiatives that they’re working on. Those are the same initiatives that we’re working on here. I think in The US, it’s I I think the US sales force is good.

I think there’s some some questions. You know, certain reps do certain things better than other reps. So when you’re a new company, you typically have people that will come out that are I I don’t know if you wanna call them mercenaries or these these kinda early stage startup guys. They come in and they can open up the big accounts for you, but that’s what they do. They go in, they open up big accounts, and they move on.

They wanna cover cases and move on. We we need some people that can dig deep. I need to get I need to get same store sales up, and that involves doing some things that that those sales reps might not like to do. Ones that do like to do that are on board. They get the program, and they’re with it.

And some of them might move on, and we’ll we’ll replace them with people that that are on board.

John Young, Medical Technology Analyst, Canaccord: Are you seeing any notable turnover today because of that?

Steve Williamson, CEO, Pulmonics: None. Well, notable. There’s there’s some turnover that we expected. As you know, we had 55 territory managers. We moved that to 45

John Young, Medical Technology Analyst, Canaccord: Mhmm.

Steve Williamson, CEO, Pulmonics: As we we try to branch out and make sure that we were getting those COPD physicians. So so a lot of that kinda took care of itself Okay. If you will, and as we’ve we’ve had the changes there. And yeah.

John Young, Medical Technology Analyst, Canaccord: I know we have a minute left. Mehul, I do wanna ask you a question on just you’re able to reduce the operating operating expense guidance along with the guidance revision for q two. What cost efficiencies have you been able to implement? What’s offset the change in revenue expectations?

Mehul Yoshi, CFO, Pulmonics: So, John, I’d say we have a number of programs in place, a bunch of programs around operational efficiencies that include things like automation. So we’ve just upgraded our ERP, and so that’ll enable further scale as we grow. We are optimizing IT systems and efficiencies and tools, supply chain optimization, so supplier pricing and a lot of kind of inventory management aspects of it. We also practice, you know, what I would call lean practices. So, it’s not just an operations capability, but also in SG and A where we try to eliminate waste and just drive efficiencies.

Then there’s some really spending initiatives and one basic one is around zero based budgeting, right? So, you don’t just grow your expenses 10% on top of what you did, you know, last quarter or last year. So, we’re really scrutinizing spend focused on driving revenue growth and clinical trials.

John Young, Medical Technology Analyst, Canaccord: I think we’re unfortunately out of time, so we can’t dig in more, but I appreciate you guys coming today and thanks for Thanks

Steve Williamson, CEO, Pulmonics: for having

John Young, Medical Technology Analyst, Canaccord: us, John. Thanks.

Steve Williamson, CEO, Pulmonics: Appreciate it.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.