Theralase® Increases Revenue 12% for 3Q2017 Financial Statements
Toronto, Ontario – November 29, 2017
Theralase Technologies Inc. (“Theralase®” or the “Company”) (TSXV: TLT) (OTCQX: TLTFF), a leading biotech company focused on the commercialization of medical devices to eliminate pain and the development of Photo Dynamic Compounds (“PDCs”) to destroy cancer, announced today that for the nine-month period ended September 30, 2017, total revenue increased to $1,354,254 from $1,206,726 for the same period in 2016, a 12% increase.
In Canada, revenue increased 44% to $1,046,508 for the nine-month period ended September 30, 2017 from $728,277 for the nine-month period ended September 30, 2016.
In the US, revenue decreased 32% to $272,305 from $399,445 and international revenue decreased 55% to $35,441 from $79,004 for the same periods.
The increase in Canadian revenue in 2017 and the corresponding decrease in US and international revenue is attributable to the Company systematically building its sales and marketing teams commencing with the Canadian market, the learning curves and attrition associated with training and developing a new sales force in the US and the ramp-up strategy of successfully advancing the TLC-2000 therapeutic laser system.
Cost of sales for the nine-month period ended September 30, 2017 was $558,221 (41% of revenue) resulting in a gross margin of $796,033 or 59% of revenue, compared to a cost of sales of $414,794 (34% of revenue) for the nine-month period ended September 30, 2016, resulting in a gross margin of $791,932 or 66% of revenue.
Cost of sales is represented by the following costs: raw materials, subcontracting, direct and indirect labour and the applicable share of manufacturing overhead.
Cost of sales increased primarily by the retention of external engineering teams, enlisted to optimize the TLC-2000 therapeutic laser system software, firmware and hardware to support the Company mandate of advancing the TLC-2000 to a recurring revenue model in 2018.
Selling and marketing expenses for the nine-month period ended September 30, 2017 were $1,407,387 representing 104% of sales, compared with $1,114,180 or 92% of sales for the nine-month period ended September 30, 2016.
The increase is primarily due to increased corporate spending on sales and marketing personnel, intended to augment sales in future financial quarters.
Selling expenses are expected to continue to increase in the future as the Company expands in Canada, the US and international markets.
On-going investment in: sales personnel, marketing and advertising are required expenses to generate and maintain / increase revenues in subsequent financial quarters.
Administrative expenses for the nine-month period ended September 30, 2017 were $2,222,701 representing a 11% increase from $1,993,897 for the nine-month period ended September 30, 2016.
Increases in administrative expenses are attributed to the following:
- Insurance expenses increased 28% due to increased product liability coverage
- Professional fees increased by 224%, as a result of increased patent related fees for the PDT division.
- Administrative salaries increased by 15%, as a result of hiring clinical and educational staff.
Gross research and development expenses totaled $2,044,838 for the nine-month period ended September 30, 2017 compared to $1,598,175 for the nine-month period ended September 30, 2016, demonstrating a 28% increase.
The increase in research and development expenses is a direct result of investments in the current Phase Ib clinical trial for Non-Muscle Invasive Bladder Cancer (“NMIBC”).
Research and development expenses represented 37% of the Company’s operating expenses for the nine-month period ended September 30, 2017 and represent direct investment into the research and development expenses of the TLC-3000 anti-cancer technology.
The net loss for the nine-month period ended September 30, 2017 was $4,893,771 which included $543,891 of net non-cash expenses (i.e.: amortization, stock-based compensation expense, foreign exchange gain/loss and lease inducements).
This compared to a net loss for the nine-month period ended September 30, 2016 of $3,918,320, which included $573,593 of net non-cash expenses.
The PDT division represented $2,422,067 of this loss (50%).
The increase in net loss is due primarily to three reasons:
1) Increased investment in research and development of the TLC-3200 Medical Laser and TLC-3400 Dosimetry Fibre Optic Cage (“DFOC”) used to activate the PDC TLD-1433, via laser light energy for patients being treated in the Phase Ib NMIBC clinical study.
2) Increased investment in external engineering resources to redesign the software, firmware and hardware of the TLC-2000 therapeutic laser to advance towards a recurring revenue model in 2018.
3) Increased sales, marketing and administrative personnel, related to maintaining / increasing sales of the existing TLC-2000 therapeutic laser system.
The PDT division is focused on successfully completing a Phase Ib clinical study (“Study”) for patients afflicted with NMIBC, utilizing its novel next generation light-activated, anti-cancer drug, TLD-1433.
The Study entitled, “A Phase Ib Trial of Intravesical Photo Dynamic Therapy (“PDT”) in Patients with NMIBC at High Risk of Progression, Who are Refractory to Therapy with Bacillus Calmette-Guerin (“BCG”) and Who are Medically Unfit for or Refuse a Cystectomy” commenced treating patients in March 2017 and to date has successfully treated three patients at the Maximum Recommended Starting Dose (“MRSD”) (0.35 mg/cm2) and one patient at the Therapeutic Dose (0.70 mg/cm2) of TLD-1433 PDC, activated by laser light (525 nm, 90 J/cm2) delivered through a combination of the TLC-3200 PDT Medical Laser and TLC-3400 Laser Probe DFOC technology.
Enrollment for the remaining five patients to be treated at the Therapeutic Dose is currently ongoing with Theralase’s clinical partner.
Pre-defined Study objectives for patients with high risk, Ta, T1 or Carcinoma In-Situ (“CIS”) NMIBC are:
1) Primary: Evaluate safety and tolerability. (Measured by patients who experience Adverse Events (“AEs”) Grade 4 or greater that do not resolve within thirty (30) days; whereby: Grade 1 = Mild AE, Grade 2 = Moderate AE, Grade 3 = Severe AE, Grade 4 = Life-threatening or disabling AE, Grade 5 = Death)
2) Secondary: Evaluate the PharmacoKinetics (“PK”). (movement and exit of drug within tissue) of TLD-1433 (Measured by TLD-1433 concentration levels in plasma and urine over 72 hours)
3) Exploratory: Evaluate efficacy. (Measured by Recurrence Free Survival (“RFS”), defined as the interval from Day 0 (Day of PDT treatment) to documented recurrence or death from any cause, whichever occurs first. Recurrence is defined as any new tumour growth (i.e.: any biopsy-confirmed new or recurrent tumour), evaluated at 90 days for the first three patients treated at the MRSD and primarily at 90 days for the last six patients treated at the Therapeutic Dose and secondarily at 180 days post treatment)
Interim Data Results:
1) The first three patients treated at the MRSD successfully achieved the primary, secondary and exploratory outcome measures at 90 days post treatment.
2) Patient four treated at the Therapeutic Dose successfully achieved the primary, secondary and exploratory outcome measures at 90 days post treatment. During the 90 day cystoscopy analysis, patient number four’s bladder surface wall was observed to be red and inflamed. The patient will continue to be monitored to see if this condition resolves.
3) Although not a pre-defined outcome measure of the Study, patient one, two and three have successfully achieved the primary and secondary outcome measures at 180 days post treatment.
4) Although not a pre-defined outcome measure of the Study, patient one, two and three have not achieved the exploratory outcome measure at 180 days post treatment.
Light activated TLD-1433 PDC, based on initial data, has demonstrated:
1) A high level of safety, tolerability and PK, in patients with high risk, Ta, T1 or CIS NMIBC, for 180 days post PDT treatment, when treated at the MRSD;
2) A high level of safety, tolerability and PK, in patients with high risk, Ta, T1 or CIS NMIBC, for 90 days post PDT treatment, when treated at the Therapeutic Dose;
3) An ability to delay recurrence and progression of NMIBC at the MRSD for between 90 to 180 days post treatment for patients, who have a clinical history or are at high risk of Upper Urinary Tract Urothelial Carcinoma (“UUTUC”) and potentially longer for those that do not;
4) An ability to delay recurrence and progression of NMIBC at the Therapeutic Dose for 90 days post treatment.
Patients one and two have a previous history of UUTUC diagnosed prior to their PDT treatment, while patients 3 and 4 are at high risk of UUTUC.
This clinical observation, along with peer-reviewed clinical research1,2 raises the possibility that the source of patient one, two and three’s recurrent NMIBC may have originated by seeding in the bladder from these extravesical sites, potentially confounding the exploratory outcomes for these patients (In this NMIBC patient population, 80% of patients recur, while 50% of patients progress). The extravesical upper tract locations of all treated patients were not exposed to the PDT treatment in the Study.
Although patient one, two and three, treated at the MRSD (1/2 of Therapeutic Dose), recurred at 180 days post treatment; there was no sign of progression of the disease; indicating, that they may benefit from multiple PDT treatments, delivered between 90 to 180 days post treatment.
The interim data obtained to date suggests that the Theralase PDT treatment is able to achieve the primary, secondary and exploratory objectives of the Study at both the MRSD and Therapeutic Dose, delaying recurrence and more importantly delaying progression of NMIBC, for more than 90 days post PDT treatment, which would be of particular benefit for NMIBC patients; especially, patients who do not have a previous history of UUTUC.
Enrollment and treatment of the remaining five patients to be treated at the Therapeutic Dose will provide additional data on the ability to achieve the primary, secondary and exploratory outcome measures at this dose and if so, up to which timepoint.
According to the literature, previous intravesical chemotherapeutic agents have been shown to reduce tumour recurrences; however, none of these agents has proven to be of benefit in preventing disease progression.3, 4, 5, 6
BCG, an attenuated strain of Mycobacterium bovis, which is used as a vaccine against tuberculosis, has been shown to prolong the time to development of muscle invasion7, 8; however, despite a high initial complete response rate with BCG, a significant number of participants will eventually fail BCG therapy with notable local and systemic toxicities being observed with continued, prolonged use of BCG.9
Patients with BCG-refractory NMIBC have a 50% chance of disease progression and radical cystectomy should be recommended10; however, for patients who refuse cystectomy or who are too ill for major surgery, alternative methods may be considered, but at the risk for interval disease progression.11
For such high-risk patients, failing treatment with intravesical BCG, for whom cystectomy is not an option, further BCG therapy or other intravesical therapies; including: immunotherapy, chemotherapy, device-assisted therapy or sequential combination therapy is recommended.12, 13, 14, 15
Intravesical therapy for patients with NMIBC, who are not candidates for or who refuse cystectomy, presents an opportunity for a new therapy, such at Theralase’s PDT technology, provided that the therapy:
1) Requires a limited number of treatments to be delivered
2) Provides high safety and minimal toxicity to the patient
3) Can delay recurrence and/or disease progression for a reasonable length of time
The initial data obtained to date by Theralase suggests that the Company’s PDT technology is able to achieve these objectives.
1 Azémar, MD, Comperat, E, Richard, F, Cussenot, O, Rouprêt, M (2011). Bladder recurrence after surgery for upper urinary tract urothelial cell carcinoma: frequency, risk factors, and surveillance. Urol Oncol.; 29(2):130-6 (ISSN: 1873-2496)
2 Sternberg, IA, Chen, LY, Herr, HW, Donat, SM, Bochner, BH, Dalbagni, G, Urology Service, Department of Surgery, Memorial Sloan-Kettering Cancer Center, New York, NY (2013). Upper tract imaging surveillance is not effective in diagnosing upper tract recurrence in patients followed for non-muscle invasive bladder cancer. J Urol; 190(4):1187-91. doi:10.1016/j.juro.2013.05.020
3 Martínez-Piñeiro, AJ (1990). Cancer of the bladder: where are we? Arch Esp Urol. 1990;43 Suppl 2:109-12.
4 Lamm, Donald L. M.D., Blumenstein, Brent A. Ph.D., Crawford, E. David M.D., Montie, James E. M.D., Scardino, Peter M.D., Grossman, H. Barton M.D., Stanisic, Thomas H. M.D., Smith Jr., Joseph A., M.D., Sullivan, Jerry M.D., Sarosdy, Michael F. M.D., Crissman, John D. M.D., and Coltman, Charles A. M.D. (1991) A Randomized Trial of Intravesical Doxorubicin and Immunotherapy with Bacille Calmette–Guérin for Transitional-Cell Carcinoma of the Bladder, N Engl J Med 1991; 325:1205-1209, DOI: 10.1056/NEJM199110243251703
5 Melekos, MD, Chionis, H, Pantazakos, A, Fokaefs, E, Paranychianakis, G, Dauaher, H (1993). Intravesical bacillus Calmette-Guerin immunoprophylaxis of superficial bladder cancer: results of a controlled prospective trial with modified treatment schedule. J Urol. 1993 Apr;149(4):744-8.
6 Shelley, Mike, Court, JB, Kynaston, H, Wilt, Timothy, Coles, Bernadette, Mason, Malcolm (2003). Intravesical Bacillus Calmette-Guérin versus mitomycin C for Ta and T1 bladder cancer. Cochrane Database of Systematic Reviews, John Wiley & Sons, Ltd, DOI: 10.1002/14651858.CD003231, US: http://onlinelibrary.wiley.com/doi/10.1002/14651858.CD003231/abstract
7 Herr, Harry W. (1988), Bladder cancer: Pelvic lymphadenectomy revisited, Journal of Surgical Oncology, Wiley Subscription Services, Inc., http://dx.doi.org/10.1002/jso.2930370407, 10.1002/jso.2930370407
8 Sylvester, RJ, van der Meijden, AP, Lamm, DL (2002). Intravesical bacillus Calmette-Guerin reduces the risk of progression in patients with superficial bladder cancer: a meta-analysis of the published results of randomized clinical trials. J Urol. 2002 Nov;168(5):1964-70. PMID: 12394686, DOI: 10.1097/01.ju.0000034450.80198.1c
9 Herr, H. W., Badalament, R. A., Amato, D. A., Laudone, V. P., Fair, W. R., Whitmore, W. F., Lamm, D. L. (1989). Superficial bladder cancer treated with bacillus Calmette-Guerin: A multivariate analysis of factors affecting tumor progression. Journal of Urology, 141(1), 22-29.
10 Sylvester, Richard J., van der Meijden, Adrian P.M., Oosterlinck, Willem, Witjes, J. Alfred, Bouffioux, Christian, Denis, Louis, Newling, Donald W.W., Kurth, Karlheinz (2005). Predicting Recurrence and Progression in Individual Patients with Stage Ta T1 Bladder Cancer Using EORTC Risk Tables: A Combined Analysis of 2596 Patients from Seven EORTC Trials, European Urology, Volume 49, Issue 3, March 2006, Pages 466-477, https://doi.org/10.1016/j.eururo.2005.12.031
11 O’Donnell, Michael A. (2012). Treatment of non-muscle-invasive bladder cancer, http://ether.stanford.edu/urology/Treatment%20of%20non-muscle-invasive%20bladder%20cancer.pdf
12 Hall, M. C., Chang, S. S., Dalbagni, G., Pruthi, R. S., Seigne, J. D., Skinner, E. C., Schellhammer, P. F. (2007). Guideline for the Management of Nonmuscle Invasive Bladder Cancer (Stages Ta, T1, and Tis): 2007 Update. Journal of Urology, 178(6), 2314-2330. DOI: 10.1016/j.juro.2007.09.003
13 Van Rhijn, B. W.G., Van Der Kwast, T. H., Kakiashvili, D. M., Fleshner, N. E., Van Der Aa, M. N.M., Alkhateeb, S., Bangma, C. H., Jewett, M. A.S., Zlotta, A. R. (2010), Pathological stage review is indicated in primary pT1 bladder cancer. BJU International, 106: 206–211. doi:10.1111/j.1464-410X. 2009.09100.x
14 Lightfoot, Andrew J., Rosevear, Henry M., O’Donnell, Michael A. (2011). Recognition and Treatment of BCG Failure in Bladder Cancer, The Scientific World Journal. 11. 602-13. 10.1100/tsw.2011.30.
15 Yates. D.R., Brausi, M.A., Catto, J.W., Dalbagni, G., Rouprêt, M., Shariat, S.F., Sylvester, R.J., Witjes, J.A., Zlotta, A.R., Palou-Redorta, J. (2012). Treatment options available for bacillus Calmette-Guérin failure in non-muscle-invasive bladder cancer. Eur Urol. 2012 Dec;62(6):1088-96. doi: 10.1016/j.eururo.2012.08.055.
About Theralase Technologies Inc.
Theralase Technologies Inc. (“Theralase®” or the “Company”) (TSXV: TLT) (OTCQX: TLTFF) in its Therapeutic Laser Technology (“TLT”) Division designs, manufactures, markets and distributes patented super-pulsed laser technology indicated for the treatment of chronic knee pain, and in off-label use, the elimination of pain, reduction of inflammation and dramatic acceleration of tissue healing for numerous nerve, muscle and joint conditions. Theralase’s Photo Dynamic Therapy (“PDT”) Division researches and develops specially designed molecules called Photo Dynamic Compounds (“PDCs”), which have demonstrated an ability to localize to cancer cells and then when laser light activated, effectively destroy them.
This news release contains “forward-looking statements” which reflect the current expectations of management of the Corporation’s future growth, results of operations, performance and business prospects and opportunities. Such statements include, but are not limited to, statements regarding the proposed use of proceeds. Wherever possible, words such as “may“, “would“, “could“, “should”, “will“, “anticipate“, “believe“, “plan“, “expect“, “intend“, “estimate“, “potential for” and similar expressions have been used to identify these forward-looking statements. These statements reflect management’s current beliefs with respect to future events and are based on information currently available to management. Forward-looking statements involve significant risks, uncertainties and assumptions. Many factors could cause the Corporation’s actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements; including, without limitation, those listed in the filings made by the Corporation with the Canadian securities regulatory authorities (which may be viewed at www.sedar.com). Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward looking statements prove incorrect, actual results, performance or achievements may vary materially from those expressed or implied by the forward-looking statements contained in this news release. These factors should be considered carefully and prospective investors should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in the news release are based upon what management currently believes to be reasonable assumptions, the Corporation cannot assure prospective investors that actual results, performance or achievements will be consistent with these forward-looking statements. The Corporation disclaims any intention or obligation to revise forward-looking statements whether as a result of new information, future developments or otherwise except as required by law. All forward-looking statements are expressly qualified in their entirety by this cautionary statement.Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchanges) accepts responsibility for the adequacy or accuracy of this release.