Pulmonx at Wells Fargo Conference: Strategic Growth and Challenges

On Thursday, 04 September 2025, Pulmonx (NASDAQ:LUNG) presented at the Wells Fargo 20th Annual Healthcare Conference 2025, addressing both the challenges and opportunities facing the company. While the company acknowledged a slowdown in U.S. revenue growth due to hospital capacity issues, it highlighted strategic initiatives such as direct-to-patient advertising and new product launches to drive future expansion. International markets, particularly Europe, showed strong growth, providing a positive outlook for the company.

Key Takeaways

• Pulmonx is addressing U.S. revenue deceleration by streamlining referral networks and enhancing hospital workflows.
• International growth remains robust, with Europe showing double-digit increases.
• New initiatives, including AeriSeal® and LungTraX™, are expected to significantly boost future growth.
• The company maintains a strong focus on cash management and operational efficiency.
• Margin improvements are anticipated as the revenue mix shifts away from China.

Financial Results

• Gross Margin: Full-year guidance remains at 74%, with expectations of exceeding 75% in the latter half of the year.
• Operating Expenses (OpEx): Guidance has been tightened to a range of $128-$130 million.
• Cash Management: The company expects cash burn to be similar to or slightly better than in 2024.
• International Revenue: Achieved 32% growth in Q2, though a slowdown in China is expected to impact the second half.

Operational Updates

• U.S. Growth Initiatives: Strategies include direct-to-patient advertising, which is projected to attract 125,000 patients by 2025, and partnerships to enhance patient identification.
• International Expansion: Strong growth in Europe and ongoing studies in Japan, with a commercial launch anticipated in 2027.
• AeriSeal® Development: Clinical trials are progressing, with potential FDA submission in 2027, aiming to expand the treatable patient population by 20%.

Future Outlook

• Growth Strategy: Pulmonx targets a 20% long-term growth rate, driven by U.S. recovery and new product introductions.
• Margin Outlook: Improvement expected through enhanced U.S. revenue and cost efficiencies.
• Competition: The company remains confident against new entrants, emphasizing the strength of its Zephyr® valves.

Q&A Highlights

• U.S. Growth Deceleration: Addressed through advertising and automation tools.
• LungTraX™ Impact: Early data shows increased patient volume, aiding U.S. recovery.
• AeriSeal® Potential: Expected to improve patient experience and expand the market.

For a detailed understanding, readers are invited to refer to the full transcript below.

Full transcript - Wells Fargo 20th Annual Healthcare Conference 2025:

Simran Kaur, Medical Device Analyst, Wells Fargo: Okay, welcome back to the 2025 Wells Fargo Healthcare Conference. I’m Simran Kaur, one of the medical device analysts here at Wells Fargo. I’m pleased to be hosting Pulmonx for this fireside chat. With us from the company are President and CEO Steve Williamson and CFO Mehul Joshi. Thank you guys for being here today.

Steve Williamson, President and CEO, Pulmonx: Thanks for having us.

Simran Kaur, Medical Device Analyst, Wells Fargo: Maybe we’ll just start off with a higher level question. Steve and Mehul, you both have been in your roles as CEO and CFO respectively for over a year now. Reflect on your tenure at Pulmonx so far. What has gone better than you expected? Where do you still see room for improvement, and anything that has surprised you?

Steve Williamson, President and CEO, Pulmonx: Sure, I’ll jump into that. I think from a surprise perspective in a good way, the biggest surprise has really been our international performance. When we came in, it was really flat outside the U.S. We made a couple of operational changes there, and we’ve seen consistent growth. I’m confident that that’ll continue. It is kind of double-digit growth moving forward. I think when people look at our company, they think a lot of the growth is just coming from China. It’s not. Actually, all our major markets in Europe grew double digits last quarter. We’ve got strong teams in place, and they continue to grow. We’ve got significant interest from the physician community. We’ve got more patient advocacy going on, a lot of peer-to-peer education into the pulmonologists that are in the communities. That not only looks good now, but I’m confident it’ll continue.

One of the things that’s been interesting for me that we saw was we saw a decline in our revenue growth quarter over quarter in the U.S. over the last six quarters. As we look at what was causing that, I think it’s a combination of kind of capacity at these hospitals and their ability to manage the workflow of these patients. It’s not across the board. There are really differences in what they can do in different hospitals just based on the infrastructure that they have in place. There’s significant variability. What’s been really good from my perspective is I believe that with all the programs that we’ve put in place, and I’m happy to talk through many of them, but with the tools that we put in place, we’ve really kind of built the puzzle now. I think we’ve got the center of that puzzle really built out.

I’m confident that these are the right tools to make sure that this business will continue to grow into the future. We have a number of significant initiatives that should grow with AeriSeal® and our AeriSeal® Convert2 clinical trial that’s going on. We’d expect to see that wrap up enrollment towards the end of 2026. Then we’ve got a six-month follow-up. We’ll do an FDA submission there. That opens up 20% of patients that currently go through the whole workflow process that actually take up some capacity of the hospital but don’t get treated. Those patients will now be able to be treated with AeriSeal®. They should be able to be on that once we have approval, should be able to go on and get valves. I think there’s real good upside there.

In the interim, all the different programs we’ve put in place, as I said, the cake’s taken a little bit to bake, but we’ve got it together and it looks good right now.

Simran Kaur, Medical Device Analyst, Wells Fargo: Okay, great. Yeah, Steve, I think as you mentioned, the key concern for investors is that U.S. growth deceleration. What’s interesting is that you’ve actually expanded your U.S. commercial footprint pretty meaningfully over the past eight or nine quarters. You’ve put in these initiatives over the past year. When do we see that translate into more sustained and meaningful growth?

Steve Williamson, President and CEO, Pulmonx: Yeah, so my expectation would be that it happened now. It’s taken a little bit longer, as I said, as the cake is baking, but I think we are already starting to see it. If you look at the direct-to-patient advertising that we’ve done, we’ll have 125,000 patients between 2024 and 2025 that will actually come on to our website, take a quiz, or call into our respiratory therapist hotline. That’s 125,000 patients that are out there saying, "I need some help that I’m not getting right now." I think that’s a real positive, and it speaks to the TAM that we have of 500,000 patients in the United States that have severe emphysema that are valve eligible. That makes me feel really good. The programs that we’ve put in place, I think are confident.

I’m confident that those are a great way to capture those patients and actually move them through the funnel. We’d expect to see that in the near term.

Simran Kaur, Medical Device Analyst, Wells Fargo: Okay, great. Maybe just, you know, you referenced capacity constraints earlier. How much of that slowdown in the U.S. is structural versus temporary and just getting some of these initiatives to convert to revenue? I guess, in other words, are we seeing early signs of saturation in existing centers, or is this more of a function of execution and capacity?

Steve Williamson, President and CEO, Pulmonx: Yeah, as far as the TAM and our ability to, are we tapping out there? I don’t think we’re close. I think we’ve validated the TAM with the interest that we get in our procedure through the direct-to-patient advertising. As you look down, I mean, we’ll do, there’ll be less than 10,000 BLDR procedures that are done in 2025, or approximately 10,000 procedures. Out of a 500,000 patient TAM, we’re really just scratching the surface. It does get to the operational constraints that are in place. Fortunately, we identified that early, and we’ve been talking about it with you, actually, for over a year on the different tools that we’re putting in place to get through those. Whether it be automated tools that allow the hospitals to identify patients without kind of the need for external support there.

You can actually have an automated program that will look at the CT scans that are in the PACS system and identify patients with severe radiographic emphysema. Our new partnership that we just announced with Jaeger, which is the leading PFT or pulmonary function test company in the world, is important. There are 16 million PFTs that are done in the United States. That’s one of the workup steps for valves, by the way. Now we’ve brought ourselves downstream into that testing process, and we’ve made a partnership with a company that will be able to identify these patients based on the results of the test and then highlight on their test report that they are potential candidates. I feel like we’ve got a great opportunity there to tap into this TAM more.

I think it’s real, and it’s just getting through those operational challenges, and I think they’re short-term operational challenges.

Simran Kaur, Medical Device Analyst, Wells Fargo: Okay, that makes total sense. Maybe just about those procedure constraints at the hospital. I know on the Q2 call, you said it is in part due to robotic bronchoscopy and lung cancer screening diverting some of those resources. However, you also did call these out as potential future tailwinds. First, how do you keep the Zephyr® Endobronchial Valve top of mind for accounts in the near term? Please elaborate on how these do become eventual tailwinds.

Steve Williamson, President and CEO, Pulmonx: Absolutely. If you look at the whole interventional pulmonology group right now, it was a small group of doctors if you go back five years. Right now, there’s over 500 interventional pulmonologists with close to 50 that are waiting to take their boards. There’s another 40 to 45 that are coming out of the fellowship programs every year. You have this large growth of interventional pulmonologists that are going after a big need in the communities. There’s a big demand from hospitals. You see this large growth in the doctors. The great news about that for us is that these doctors are coming out of training programs where they’re using our valves right now. When they go out into the community, they’re already trained. They can get up and running. They can start their programs.

From a capacity perspective, just to speak directly to your point, there are so many lung nodules that are out there, and there are so many lung biopsies that are getting done. What happens is there’s just a finite amount of time for a lot of these programs that have been kind of backburner programs for a while. As you start to say, okay, we can build out a service line that’s profitable for the hospital by incorporating more than just lung nodules and more than just lung cancer screening, we can do a lung health screening and do a full portfolio of treatments for these patients. There’s really a willingness to do that. As the hospitals see that they’ve invested significant dollars into these programs, it’s like, why wouldn’t you bring on additional products that can treat more patients in your community?

Just a quick anecdote, I was at the AABIP, and that’s the American Association of Bronchology and Interventional Pulmonology. They had a meeting in Austin here, and there was really an overwhelming excitement throughout the whole meeting about BLDR and what it means. There was actually a session on how to build out a lung health program, why it works for the hospital, how to do overall lung screening rather than just focus on cancer detection.

Simran Kaur, Medical Device Analyst, Wells Fargo: Okay, great. Steve, I know another sort of challenge that the company has laid out before even your time was the referral network and really streamlining that part of the procedure. Maybe help us understand what exactly are you doing to help work out some of the kinks with respect to the referral network and any metrics that you can share, whether that has started to pull through to procedures.

Steve Williamson, President and CEO, Pulmonx: Sure. That community pulmonologist, I talked about 500 interventional pulmonologists. You also have advanced bronchoscopists that will do our procedure, but you have a huge community of just community pulmonologists that are treating your asthma patients, your standard COPD patients, patients that have bad coughs that go in and see these pulmonologists. Most of them are aware of valves, but they don’t know the patient that will benefit from getting a valve. What we’ve done is we’ve made a concerted effort here, and we’re really putting more effort behind this now to educate them on the proper patients so that when they identify these patients that come in that are having difficulty breathing, they can see their CT scan or they get a PFT test. They can see that this is a good candidate. They know the right candidates to refer into interventional pulmonology. They end up getting treatment.

They go back to the referrer and say, "Hey, I got my treatment. I feel great." You can really build that chain. We’ve done that a couple of ways. One through CME education. We work with Medscape, and you can really get a large swath of that population in one fell swoop there. We’ve also hired what we call therapy awareness specialists. We hired seven of them. They were hired at the end of May, started in June. In June, we saw a 19% increase in the StratX® volume coming out of those accounts. Early indicators, it’s still first inning there, but early indicators are that this is a good place to go. If we go in, if you have a sales rep talking to a doctor explaining the technology, there’s really no other options for these patients that can move forward and get referred in.

That’s kind of the direct marketing that we do for these physicians. We also do significant peer-to-peer education where we’ll have doctors come in and talk about the technology, how they do it, showcases, let them know that, "Hey, if you send your patient to me, I’m going to treat him and I’m going to send him back to you. I’m not going to steal your patient. I don’t want your patient to be my patient. You can have them. I do the interventional work." We do a lot of kind of direct sales and marketing that way. The flip side of that is where we’ve automated the process. Now I don’t need that COPD physician necessarily to be key in the middle.

I can actually identify patients that are already in the hospital network through the PACS system and say, "You’ve got patients here that are under your roof right now. They’ve already gone through some testing in some instances." We can circumvent that whole process and actually get that patient through workup and get them going and get them worked up quickly, either through CT screening or through the PFT, this new partnership we have. Directly, we’re going after them. At the same time, we’ve got two automated ways. When the doctors are asleep at night, they wake up and there’s a list of patients for them in the morning.

Simran Kaur, Medical Device Analyst, Wells Fargo: Got it. Okay. You mentioned seeing record StratX® volume in June and July. How sustainable are these trends, and how long does it take to flow through to procedures? You know, will we see revenue contribution in Q4? Is that assumed in the guidance ramp?

Steve Williamson, President and CEO, Pulmonx: Yeah. We assumed what we had seen in our prior StratX® in the guidance. We see typically the amount of time it takes a patient to get through the workup depends on where they’re identified in the process. With LungTraX™, we’ve identified sometimes we find a patient that has no idea that they had emphysema. They might have come in for a car crash and all of a sudden they see that they’ve got radiographic emphysema. There’s an education process that takes place. They want to go talk to their doctor, so that takes a little bit longer. Some of these patients are already under the roof. They’re being treated for a nodule or they had something removed, and those patients can then come through and they typically work through much faster.

There’s real variability in that StratX® number, but our expectations are that we should see sustained growth over time.

Simran Kaur, Medical Device Analyst, Wells Fargo: Okay. You’ve highlighted LungTraX™ as a growth initiative. What early data points are you seeing from the launch thus far? Can you share any metrics around the number of sites, the impact of diagnostic volumes, physician adoption, anything to help validate its impact?

Steve Williamson, President and CEO, Pulmonx: Sure. I can give you kind of a broad generalization and then some specifics on an account or two. There’s such variability in the accounts based on where they’re pulling patients from, the number of patients that they get. Our first account came in, they’re really pulmonary focused. They’ve got a lot of sick patients that already have diagnosed pulmonary issues. They saw a significant pickup in the patient volume right away. They were able to identify a large number of patients, and those patients went through. They get excluded if they’re smokers. If they’re not willing to stop smoking, then they go away. That’s a big swath that’s not ready to stop smoking or doesn’t want to, or they’ve given up. Those patients go away, and then it’s this next tier they go through the workup.

This account, the first one that came on board, saw so many patients coming through. They didn’t have the bandwidth to manage that patient volume. What they did was work with the virtual navigator service that I’ve mentioned before, where for $5,000 a month, this account goes in and manages all of the patients that come through. They can manage them at any level to any extent. They can just manage them through the workup, or they can manage them from hit on the website through the workup or all the way to the table, depending on what the hospital wants to do. Our first two LungTraX™ Platform accounts had such volume and so many people identified that they brought on virtual navigator services to help aid getting those patients through.

There was a presentation done at AABIP by one of the doctors, and he’s found that they identified 10 patients. This was in a couple of months. When you think about it, you’re like, okay, 10 patients doesn’t sound like a lot. Our average hospital does four to five procedures a quarter. They found 10 patients and have treated 10 patients in a quick amount of time. The ability to double their volume by identifying these patients early and pushing them through the process is a good kind of sign for us. Another hospital that just came on board has two navigators in place, and their StratX® Lung Analysis Report have gone through the roof. The early indicators there are strong. It’s just we need more patients, I need more hospitals on board, and then we’ll get more patients through.

The hospitals on board, really the limiting factor there is we go through a security review. We got to go through a legal review. In our pilot, the first account took a month to go through the security review and the legal review and then had their first patient scheduled in 45 days. We’re looking at that saying, okay, if we roll out, that’s what it’s going to look like. It doesn’t look like that. It takes a little bit longer to get through and get LungTraX™ into the hospital system. The good news is once we’ve got through that process, which can vary from a month to six months to, I don’t know, there might be some that even go longer, but I would say it’s between a month and six months.

Once we get through that process, those patients should move quickly because the installation of the technology is very quick. It takes us less than 30 minutes to go in, install, and train on it. It’s very, very easy. We’re not standing up a new EMR system where the whole hospital has to be trained. We just go in, we plug into the PACS system, we’re ready to go.

Simran Kaur, Medical Device Analyst, Wells Fargo: Okay. Maybe how should we think about scaling LungTraX™ across your U.S. base? You have over 300 accounts. When does it become a meaningful contributor to the U.S. turnaround?

Steve Williamson, President and CEO, Pulmonx: Yeah, I would say it’s, we would hope to, as I said earlier, I hoped it would be by now. That’s one of the reasons we brought down the guidance, it just takes a little bit longer to get these customers through. The good news here is when we go through and we work with them, the system works well. I mean, there was an operational risk there. We’ve kind of hurdled that. Now it’s just moving forward and getting through and getting the patients working through them. I would expect towards, it’s contemplated in our guidance, but towards the back half of this year and then into next year, we would expect to see pickup there.

Simran Kaur, Medical Device Analyst, Wells Fargo: Okay. That’s helpful. Maybe as we think about sort of productivity of these accounts, you talked about four to five procedures per quarter. Now, in one account, you’ve seen almost a doubling of that with LungTraX™. I guess realistically, what’s your expectation of where procedure volumes can go?

Steve Williamson, President and CEO, Pulmonx: Procedure volume was up 20, 25%. I think that would be great. I don’t think we’ll see that in all the LungTraX™ Platform accounts, but I think there’s certain ones that have the infrastructure that really want to build out these programs that we’ll see that. It’ll just take time as that grows. I’m confident it’s the right playbook. It’s just implementing it and then seeing it through.

Simran Kaur, Medical Device Analyst, Wells Fargo: Okay. You’ve talked about 20% growth long term, with, I believe you’ve said the U.S. business growing above that. Realistically, how long do you think it will take to get there?

Steve Williamson, President and CEO, Pulmonx: When we say long term, I’m typically saying three to five years is kind of what we deem as long term. Hopefully, it’s faster than that. The really big gating factor here is what we do in the near term. I think has been great outside the U.S. I think we’ve got some good levers here in the U.S. You start looking at AeriSeal®. I mean, 20% of the patients that go in through that workflow don’t get treated. You should see a 20% pickup there plus an additional procedure. We would expect to see significant growth once we come up with that product.

Simran Kaur, Medical Device Analyst, Wells Fargo: Got it. Is AeriSeal® a meaningful component of that growth?

Steve Williamson, President and CEO, Pulmonx: Absolutely.

Simran Kaur, Medical Device Analyst, Wells Fargo: Got it. As you mentioned earlier, international revenue was a standout in Q2, I think 32% growth. Which markets are proving to be the most scalable today? How sustainable is this level of growth in the U.S. business?

Steve Williamson, President and CEO, Pulmonx: I would say all the markets are really proving out right now. We’re doing well across Europe in every major market, seeing double-digit growth. I’ve been very proud of what we’ve seen in a couple of the markets that were typically laggards before, where we’ve gotten new leadership in that has really implemented the plans. We’re seeing that it is paying dividends. We’ve got more community engagement. We’ve got our treating centers engaged. They want to grow their programs, and we’ve built this momentum across Europe and in all the major geographies. I think that’s great. If you look at Asia, I think that can be even better from a growth perspective. We’ve got our China business is obviously doing well. We’ll anniversary, or we just anniversary that agreement. It won’t look great this year on paper, but moving forward, it will.

I think the China opportunity is a huge one. We just met with our distributors last week. They came in to visit us, and they walked through their plans with us, and they look great. I’ve got a high level of confidence in what they’re doing out there and the training that they’re doing and their ability to grow that business. Japan as well. We’ve got our Japanese post-approval study that actually we’ve got Ministry of Health approval right now. We have to get to 140 patients and just show that there’s no real differences between our LIBERATE clinical data and what we’re seeing in the Japanese population. We’ve got the ability to go out and sell.

Simran Kaur, Medical Device Analyst, Wells Fargo: Okay.

Mehul Joshi, CFO, Pulmonx: Maybe I could just add on there. Simran, I think you also asked how sustainable is that growth rate. We had 30+% in Q1 and Q2. It’s likely not sustainable at the total U.S. OUS level in Q3 and Q4 because, as you recall, China, the Chinese distributor did some purchasing ahead of some of the tariff deadlines and whatnot. We won’t get significant orders from China in the second half of the year. We did last Q3 and Q4. The other international markets will grow, as Steve mentioned, double digits, but 0% growth or negative growth in China in the second half will dampen OUS growth rates.

Simran Kaur, Medical Device Analyst, Wells Fargo: Okay, got it. On a normalized kind of underlying basis, we should continue to see sort of strong double digits growth?

Mehul Joshi, CFO, Pulmonx: Yes.

Simran Kaur, Medical Device Analyst, Wells Fargo: OUS, okay.

Mehul Joshi, CFO, Pulmonx: When China comes back next year, you’ll see that kind of growth as well in China. We hope it’ll be better than that.

Simran Kaur, Medical Device Analyst, Wells Fargo: Do you expect OUS growth to continue to outpace U.S. growth beyond just this year?

Mehul Joshi, CFO, Pulmonx: Over the long term, I would say no, right? As these growth initiatives kick in and we start seeing results, the line should cross over time.

Simran Kaur, Medical Device Analyst, Wells Fargo: Okay, got it. Steve, can you remind us of the timelines for commercial launch in Japan?

Steve Williamson, President and CEO, Pulmonx: Sure. We’ve got 140 patients that we need to do in that study. We are currently enrolling. We back-end loaded the enrollment plan for that. As I mentioned, the good news is that they’re actually paying for the procedures. It’s approved by the Ministry of Health already. We’ll see a big ramp here in 2026, and our expectation is that that’s complete approximately at the end of the year.

Simran Kaur, Medical Device Analyst, Wells Fargo: Okay, so it’s a 2027 contribution story?

Steve Williamson, President and CEO, Pulmonx: We’ll see the contribution at 2026 a little bit.

Simran Kaur, Medical Device Analyst, Wells Fargo: Okay.

Steve Williamson, President and CEO, Pulmonx: Because as they ramp up the clinical trial, they pay for that product, and as we go into 2027, we’ll have a broader commercial launch.

Simran Kaur, Medical Device Analyst, Wells Fargo: Got it. That’s helpful. Maybe just moving to the P&L for a little bit. Gross margin did take a step back in the quarter, but you maintained the full year guidance of 74% gross margin. This implies an acceleration to, I think, above 75% in the second half. Just talk about the drivers of margin progression and is mid-70% gross margin level sustainable?

Mehul Joshi, CFO, Pulmonx: Sure. The first half was really influenced by the OUS mix, specifically China, where we do get lower margins because it’s a distributor sale. One thing to keep in mind is that on an operating margin perspective, it is accretive because we have no significant costs for China. That’s what diluted the margins in the first half of the year. As China’s sales decline significantly in the second half, and the U.S. becomes a greater contributor, we should see margins tick up above 74% and it’ll average out to around 74% for the year. Over the longer term, as we continue to grow volumes and the U.S. comes back, as well as some of our cost-out initiatives, we believe a mid-70s margin is very attainable.

Simran Kaur, Medical Device Analyst, Wells Fargo: Got it. Okay. OpEx guidance was tightened by about $5 million at the midpoint to $128 to $130 million for the year. Where are you finding efficiencies on that line without slowing growth initiatives?

Mehul Joshi, CFO, Pulmonx: Right. We lowered OpEx to the extent of the gross profit impact on the revenue guidance reduction. We are very strict and disciplined about maintaining our burn and our cash balance. Our cash burn expectations are similar to when we set them in early January, and they should be around the same as 2024 or slightly better. You can do the math on what kind of cash balance we’ll have at the end of this year, which will give us a couple of years of runway at least. Where do we get that? We have slowed down non-revenue generating hiring. We are really managing a lot of our vendors and other spend in a more significant manner than Steve and I had started when we joined. We’re also sequencing a bunch of campaigns and things which should yield some ROI and some efficiencies.

We are not at all eliminating any revenue generating spend for the short term as well as the long term. We are continuing to fund our growth initiatives as well as our clinical trials. We have a couple of other things like we have some automation that’s rolling in, which will help drive scale in terms of expenses. We have supply chain initiatives that’ll help with gross margins and things like that.

Simran Kaur, Medical Device Analyst, Wells Fargo: Okay. Got it. Maybe before we talk about your pipeline, one question I do have on competition. How are you thinking about potential impact to Zephyr® from new device entrants? I know there is a smaller private company that recently raised capital and is moving to a pivotal trial with a competitive device. Any reaction to that?

Mehul Joshi, CFO, Pulmonx: What company are you talking about?

Steve Williamson, President and CEO, Pulmonx: Yeah, so there is a company that did just raise a lot of capital, actually, to start their pivotal trial. It’s an interesting product. It’s a stent. I don’t know if people follow the stent market at all, but I came from interventional cardiology, so I know stents quite well. There are a couple of issues that happen with stenting. One is occlusion, and the other is migration. If you dig into the data and their data there, then we’ll see what happens. They’re really early stage. They just started a 250-patient trial. The first 50 patients are roll-in patients. I think they’re going to have to do some work to really tighten up their exclusion and inclusion criteria. There’s a lot that can go on. What it means to me when I looked at it and I saw the money going was, hey, people are interested in this market.

There’s an interest in investing in this market. I went to AABIP and I saw, whoa, there’s an interest in more physicians in this market. I look at our DTP. There’s a lot of interest from the community. It’s kind of this convergence where, you know, where the patients are going, the doctors are going, and the money’s going behind it. I think that’s all very positive. I think it speaks highly to the opportunities. When you look at technologies like that, like I said, we have four randomized controlled trials, 150 pieces of published data. We’ve done 40,000 valves. It’s not even a comparator. I think they’re treating sicker patients as well. Each of those patients are going to get six stents. It’s an outpatient procedure. I don’t know what reimbursement looks like for six stents in an outpatient procedure, but I’m sure they’ll figure that out.

I think they’ve got a lot of hurdles ahead. If you think of the timeline, you’re looking at two years to enroll a study like that. Then you’ve got a one-year follow-up, and then you’ve got to put everything together and then a PMA submission. You’re looking at, I don’t know, 2030-ish, and that’s assuming everything goes well.

Simran Kaur, Medical Device Analyst, Wells Fargo: Okay, fair enough. Any competitive impact or noise that you’re seeing or hearing from Olympus or pharmaceutical therapies?

Steve Williamson, President and CEO, Pulmonx: I’m not, no. Pharmaceutical therapies are interesting. There’s a lot of, you probably see a bunch of TV commercials about, hey, we’re now approved for COPD. These patients aren’t, our patients aren’t the ones that the pharmaceuticals are going after. The good news is they’re bringing attention to the space, but those patients, they have chronic inflammation, basically. They’re trying to knock down that inflammation with these different drugs. We need a mechanical way to hold open that airway so that we can let that air escape. Zephyr® is proven to be an effective way to do that.

Simran Kaur, Medical Device Analyst, Wells Fargo: Okay. Let’s talk about AeriSeal®. You have said that AeriSeal® expands the TAM for Zephyr® by 20%, I believe. How does AeriSeal® help address some of the challenges that you’re facing in the U.S.?

Steve Williamson, President and CEO, Pulmonx: Yeah, probably in two ways. I think it more than addresses the TAM. If you think the TAM is 500,000 patients, I think we’re going to, it’s not just we’re going to add and make it 600,000. I would look more at who are we treating right now. 20% of those patients wake up and they’re told they can’t have a procedure. They’ve gone through the whole process. It’s really 20% kind of on the bottom right there. It’s not just this expansion of TAM, which I think is very important to delineate. Those patients now, you imagine you go through this whole workup, you can’t breathe, you’ve exhausted medical therapy, you wake up and they’re like, sorry, we couldn’t do anything. It’s very frustrating for that patient.

You’re going to go back and talk to your doctor and say, hey, you sent me to this guy to get this treatment and it didn’t do anything for me. I think we affect two things. First off, that patient wakes up, or before they go down, they say, we’re going to consent you for either valves or if you have collateral ventilation, you’re going to get AeriSeal®. You’re going to wake up having had a procedure. Following that procedure, hopefully we’ll bring you back for valves in a couple of months. We’ve got a treatment algorithm for all of these patients now. I think that’s a big positive, not just for the patient, but secondly, for that referring physician now who sees this patient come back and they don’t have 20% of the time that the patient comes back and says, why did you make me do this?

They get the patient come back and say, oh my gosh, thank you, doctor, I feel great. I think that’s very exciting for the physicians on both sides. I think they’re really looking forward to it.

Simran Kaur, Medical Device Analyst, Wells Fargo: Okay. I believe the latest timelines on U.S. approval were end of 2027, launch in 2028. I know it’s early, but how do you see, or how do you think about reimbursement, commercialization? Should we expect that you start making those investments ahead of approval?

Steve Williamson, President and CEO, Pulmonx: Yeah, I mean, we’re already looking at reimbursement. We’ve got a team that’s exceptional at this. We do a lot of work for Zephyr® Endobronchial Valves, and that’s, I think, one of the reasons we’re in a, we have a good economic story for the hospital because I think we get reasonable reimbursement for valves in most cases. With AeriSeal®, we’ll be in a similar spot. I don’t think it’s significant investment that it’s going to take us, and we’ll utilize our existing channels for sales and marketing. I don’t think there’s a huge OpEx expense that goes on top of that. Actually, contrary, I think you’ll see the spend from the clinical trials go down, and that should help from a cash burn perspective.

Simran Kaur, Medical Device Analyst, Wells Fargo: Okay. Maybe let’s just look ahead to 2026. What puts and takes do you expect from a sales perspective, and then, you know, any incremental color on the margin sides?

Steve Williamson, President and CEO, Pulmonx: Sales force or sales dollars?

Simran Kaur, Medical Device Analyst, Wells Fargo: Sales dollars, how do we think about new center adds versus productivity versus early contribution from some of the initiatives that you’ve put in place?

Steve Williamson, President and CEO, Pulmonx: Yeah, we would expect to see growth, obviously, coming from those initiatives. The puts and takes, it’s really been the timing. As we share these initiatives with the IP community, they’re excited by it. To put in a software system or to add something to the software, we need administration to come in, and it’s part of the bigger program that we’re talking about. Those are the accounts that are not going to go from four to five to five to six. They’re going to go from four to five to ten. That’s really where we want to get here. That would be the big, that’s the big push from a sales perspective. From margins, do you want to?

Mehul Joshi, CFO, Pulmonx: Yeah, just from a margin perspective, as U.S. revenue comes back, that’s the biggest contributor to margins, right? It’s the % of U.S. sales relative to total sales, and there’s always sales efficiencies in manufacturing as well as other costs.

Simran Kaur, Medical Device Analyst, Wells Fargo: Okay. We’re almost out of time here. Maybe, Steve, or Mehul, is there anything that we didn’t touch on? Anything that you think is underappreciated by investors in the story today or looking ahead? Just giving you the last word here.

Steve Williamson, President and CEO, Pulmonx: Yeah, there’s probably two things that, first, when you asked me what I was happy about, I should have mentioned that our cash management has been very, very strong. I think that our finance team has done not just a good job at managing OpEx expense, but just cash burn in general. Really titrating it with our sales growth. As we brought down our revenue guidance, we brought down our OpEx guidance. We’ll continue to manage that cash burn to elongate our runway there as much as we can. I think Mehul and his team have done a phenomenal job with that. That’s one thing that I’ve been very proud about. As far as the initiatives go, we’ve got a lot of initiatives.

We’ve moved around the sales force a little bit, focused in different areas, and put certain sales reps that are good at this in different areas and ones that are better at this in other areas. We’re starting to see positive impact from that. The cake is starting to bake. It just needs a little bit longer here. I think we’re going to see this return to growth that people are looking for.

Simran Kaur, Medical Device Analyst, Wells Fargo: Awesome. Thank you both so much.

Mehul Joshi, CFO, Pulmonx: Thank you, Faith.

Steve Williamson, President and CEO, Pulmonx: Thank you.

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