Theralase® Releases 2Q2018 Financial Statements
Toronto, Ontario – July 26, 2018
Theralase Technologies Inc. (“Theralase®” or the “Company”) (TSXV: TLT) (OTCQX: TLTFF), a clinical stage pharmaceutical company dedicated to the research and development of light activated Photo Dynamic Compounds (“PDCs”) and their associated drug formulations intended to safely and effectively destroy cancer released its 2Q2018 financial statements.Total revenue for the six-month period ended June 30, 2018 decreased to $910,690 from $1,016,734 for the same period in 2017, a 10% decrease. In Canada, revenue decreased 22% to $602,277 from $769,840. In the US, revenue decreased 13% to $183,460 from $211,453 and international revenue increased 252% to $124,953 from $35,441. The increase in international revenue in 2018 and the corresponding decrease in Canadian and US revenue is attributable to the Company hiring an International Sales Manager and restructuring the Canadian and US sales and marketing departments.
Cost of sales for the six-month period ended June 30, 2018 was $432,321 (47% of revenue) resulting in a gross margin of $478,369 or 53% of revenue, compared to a cost of sales of $394,068 (39% of revenue) in 2017, resulting in a gross margin of $622,666 or 61% 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.
The cost of sales increase, year over year, is attributed to discounted sales pricing for the TLC-1000 and TLC-2000 product line.
For the six-month period ended June 30, 2018, selling and marketing expenses decreased to $499,204 or 55% of sales, from $898,258 or 88% of sales in 2017, a 44% decrease. The decrease in selling and marketing expenses is primarily due to the restructuring of the Canadian and US sales and marketing departments, resulting in the termination of certain sales and marketing personnel.
Administrative expenses for the six-month period ended June 30, 2018 decreased to $1,143,191 from $1,522,916 in 2017, representing a 25% decrease.
Decreases in administrative expenses are attributed to the following:
- – Administrative salaries decreased by 26% due to the termination and/or resignation of certain administrative staff.
- – Stock based compensation decreased 84% due to certain current employees forfeiting all non-vested and non-exercised options totaling 4,300,000 and certain terminated or resigned employees forfeiting all non-vested and non-exercised options totaling 175,000.
- – General and administrative expenses decreased 49% due to decreased investment in investor relations and recruiting expenses.
Research and development expenses for the six-month period ended June 30, 2018 decreased to $730,104 from $1,433,968 in 2017, a 49% decrease. The decrease is primarily due to decreased expenses for conducting the Phase Ib NMIBC clinical study and placing the software, firmware and hardware changes of the TLC-2000 on temporary hold.
The net loss for the six-month period ended June 30, 2018 was $1,889,351 which included $155,265 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 same period in 2017 of $3,238,023, which included $333,826 of net non-cash expenses.
The PDT division represented $955,802 of this loss (51%) for the six-month period ended June 30, 2018.
The decrease in net loss is primarily due to three reasons:
- 1. Decreased investment in research and development in the Phase Ib NMIBC clinical study.
- 2. Decreased investment in external engineering resources to redesign the software, firmware and hardware of the TLC-2000 therapeutic laser.
- 3. Decreased sales, marketing and administrative costs.
On May 19, 2018, Theralase’s MSAB was convened to examine the clinical results obtained on the first six patients enrolled and treated in the Study utilizing TLD-1433-based Photo Dynamic Therapy (“PDT”); specifically: the primary endpoint of safety and tolerability, the secondary endpoint of pharmacokinetics (movement and exit of drug within tissue) and the exploratory endpoint of efficacy primarily at 90 days.
The MSAB is comprised of world-renowned experts in bladder cancer and have been retained by the Company to provide advice and strategic guidance on the research, development and commercialization of the TLD-1433-based PDT technology in the treatment of patients inflicted with NMIBC.
On May 30, 2018 the Company announced “Theralase Successfully Completes the Phase Ib Non-Muscle Invasive Bladder Cancer Clinical Study.” Theralase’s Medical and Scientific Advisory Board (“MSAB”) concluded that the Phase Ib Non-Muscle Invasive Bladder Cancer (“NMIBC”) clinical study (“Study”) has met its objectives and unanimously voted for the early termination of the Study based on successfully achieving its primary and secondary endpoints after six patients.
After reviewing the clinical data presented by Girish Kulkarni, MD, PhD, FRCSC, an Associate Professor at the University of Toronto, Department of Surgery and the Principal Investigator of the Study, the MSAB unanimously recommended the early termination of the Study due to achievement of the primary and secondary endpoints. The MSAB also recommended that the clinical data collected from the first three patients treated at the Maximum Recommended Starting Dose (“MRSD”) (0.35 mg/cm2) and the three patients treated at the Therapeutic Dose (0.70 mg/cm2) were sufficient to support the conclusion that the Study had successfully achieved the Study’s primary and secondary endpoints and had adequately addressed the Study’s scientific, technical and clinical questions, as per the approved Study design and clinical protocol. The MSAB recommendation to the Company was to terminate the Study based on the six patients treated to date and suggested that the Company pursue a pivotal Phase II NMIBC clinical study approval with Health Canada and the FDA with efficacy as the primary endpoint.
On July 16, 2018. The Company announced “Theralase Demonstrates Anti-Cancer Technology Prevents Recurrence of Bladder Cancer at 180 Days Post-Treatment. Patient Five Demonstrates No Clinical Evidence of NMIBC at 180 Day Cystoscopy Analysis”. The treatment was well tolerated by the patient, who demonstrated no tumour recurrence or presence of disease at the 180 day clinical and cystoscopy assessment. The patient has met Study endpoints demonstrating achievement of the primary, secondary and exploratory endpoints at 180 days post treatment and marks a new achievement for the Company.
About the Study
The Study is being used to evaluate TLD-1433, Theralase’s lead PDC, for the primary endpoint of safety and tolerability, secondary endpoint of pharmacokinetics (movement and exit of drug within tissue) and exploratory endpoint of efficacy.
Study Outcome Endpoints:
- 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. (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)
The Company is planning to submit the design of a Phase II NMIBC Clinical Study to Health Canada and the FDA, with a primary endpoint of efficacy.
About Theralase® Technologies Inc.
Theralase® is a clinical stage pharmaceutical company dedicated to the research and development of light activated Photo Dynamic Compounds (“PDCs”) and their associated drug formulations to safely and effectively destroy various cancers. The Company in its Cool Laser Division designs, manufactures and distributes patented and proprietary super-pulsed cool laser technology for the treatment of knee pain, and in off-label use, the treatment of numerous nerve, muscle and joint conditions.
This news release contains “forward-looking statements” which reflect the current expectations of management of the Company’s future growth, results of operations, performance and business prospects and opportunities. Such statements include, but are not limited to, statements regarding the Company’s development and commercialization of the TLC-2000, including with respect to ongoing redesign work and regulatory clearance process for expanded claims and the Company’s development and commercialization strategy with respect to its Anti-Cancer Technology. 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 including with respect to the ability of the Company to successfully complete the redesign work under the proposed timeframe and scope of work or at all, the availability of financing to advance the development of the TLC-2000, the ability of the Company to secure further regulatory clearances (including with respect to expanded claims) from Health Canada and/ or the FDA with respect to the TLC-2000 under the proposed timeframe and scope or at all, the ability of the Company to achieve wider commercial distribution of the TLC-2000, the ability of the Company to execute its strategy with respect to its Anti-Cancer Technology, the ability of the Company to secure further regulatory approvals from Health Canada and/ or the FDA for its NMBIC clinical studies and the ability of the Company to finalize development of, and successfully commercialize, its Anti-Cancer Technology. Many factors could cause the Company’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 Company 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 Company cannot assure prospective investors that actual results, performance or achievements will be consistent with these forward-looking statements. The Company 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.
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