Toronto, Ontario – Aug 29, 2016, Theralase Technologies Inc. (“Theralase®” or the “Company”) (TLT:TSXV) (TLTFF:OTC), 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 six-month period ended June 30, 2016, total revenue increased from $677,817 to $893,138 from the same period in 2015, an 32% increase.
In Canada, revenue decreased 12% to $497,378 from $562,890, in the US, revenue increased 219% to $316,756 from $99,343 and international revenue increased 407% to $79,004 from $15,584. The decrease in Canadian revenue in 2H2016 and the corresponding increase in US and international revenue is attributable to the Company systematically building its sales and marketing teams in the Canadian and US market and the learning curves associated with training and developing a new sales force.
Now that the TLC-2000 is FDA 510(k) cleared and Health Canada approved, Theralase has been focusing on recruiting a high performing sales and marketing team in Canada and the US with the mandate of dramatically increasing sales of the TLC-2000 across Canada and the United States, in 2016. Once these strategic markets have been established and running independently, Theralase will focus on growing its international revenues through exclusive international distribution agreements, in 2017.
Cost of sales for the six-month period ended June 30, 2016 was $281,288 (31% of revenue) resulting in a gross margin of $611,850 or 69% of revenue, compared to a cost of sales of $243,394 (36% of revenue) in 2015, resulting in a gross margin of $434,423 or 64% 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. As revenues increase, volume purchasing will continue to reduce the cost of goods sold.
Selling and marketing expenses for the six-month period ended June 30, 2016 were $665,727 representing 75% of sales, compared with $402,598 or 59% in 2015. The increase is primarily due to increased spending in marketing and sales personnel, which will augment sales in future financial quarters, aiding in sales of the TLC-2000. 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 events and advertising are necessary expenses to generate and increase revenues in subsequent financial quarters. As revenues increase, selling and marketing expenses will decrease as a percentage of revenues.
Administrative expenses for the six-month period ended June 30, 2016 were $1,407,950 representing a 43% increase from $982,841 in 2015. Increases in administrative expenses are attributed to the following:
- General and administrative expenses increased 44% due to increased spending on investor relations and research scientist activities
- Stock based compensation increased by 134% as a result of vesting of stock options to certain employees, directors and officers of the Company in 2Q2016
- Administrative salaries increased by 49% as a result of hiring clinical and educational staff.
Gross research and development expenses totaled $925,581 for the six-month period ended June 30, 2016 compared to $1,356,664 in 2015 (32% decrease). Research and development expenses represented 31% of the Company’s operating expenses for the period and represent direct investment into the research and development expenses of the TLC-3000 anti-cancer technology.
The net loss for the six-month period ended June 30, 2016 was $2,390,119, which included $422,730 of net non-cash expenses (amortization, stock-based compensation expense, foreign exchange gain/loss and lease inducements). This compared to a net loss for the same period in 2015 of $2,279,117, which included $197,152 of net non-cash expenses. The PDT division represented $1,670,064 of this loss (70%). The increase in net loss is due to increased investment in research and development of the TLC-3000, sales, marketing and administrative personnel, all related to the commencement of a Phase Ib clinical study for Non-Muscle Invasive Bladder Cancer (“NMIBC”) and sales of the next generation TLC-2000 therapeutic medical laser system, respectively.
Theralase has been very successful in executing on its strategic objectives in 2015 and 2H2016 by completing:
- Health Canada Medical Device Licence (Class III) approval of its next generation TLC-2000 Therapeutic Medical Laser System
- US Food and Drug Administration (“FDA”) 510(k) clearance of the TLC-2000
- Health Canada Clinical Trial Application (“CTA”) approval
- Princess Margaret Cancer Centre, University Health Network (“UHN”) Research Ethics Board (“REB”) approval
- Demonstrated 6 month accelerated stability and 9 month long term stability of it lead anti-cancer PDC TLD-1433
- Signed a Clinical Research Agreement (“CRA”) with UHN to conduct a Phase Ib clinical study for the indication of NMIBC.
Theralase has completed sterilization, biocompatibility and mechanical testing of the TLC-3400 Dosimetry Fibre Optic Cage (“DFOC”) medical laser probes, to be used in conjunction with the TLC-3200 Medical Laser System, to activate TLD-1433 that has absorbed into bladder cancer lesions and has submitted the information to Health Canada, via an Investigational Testing Authorization (“ITA”) on July 29, 2016.
Health Canada required information and testing that supported:
- Biocompatibility (the materials that enter the body are proven not harmful to tissue)
- Mechanical testing (the materials demonstrate the characteristics of functional reliability, tensile strength and repeatability of operation)
- Sterility (the materials that enter the body are demonstrated to be sterile)
Pending Health Canada approval of the ITA, expected in September 2016, Theralase will immediately
commence enrollment of patients into a Phase Ib clinical study in the treatment of NMIBC. The primary outcome measures of the Phase Ib clinical study will be safety and tolerability, with a secondary outcome measure of pharmacokinetics (where the drug accumulates in tissue and how it exits the body) and an exploratory outcome measure of efficacy.
The Phase Ib NMIBC clinical study protocol will commence by instilling a low dose of TLD-1433 drug into the bladders of three (3) patients with subsequent light activation using the TLC-3200 / TLC-3400 medical laser technology. These three (3) patients will then be monitored for thirty (30) days to ensure safety and tolerability of the procedure. If no adverse events are reported, then an additional six (6) patients will be enrolled at a high dose, followed by light activation and follow-up monitoring for six (6) months.
If safety and tolerability of the procedure is demonstrated in these nine (9) patients, the Phase Ib study results will support Health Canada approval and a Phase IIb multi-center efficacy study for NMIBC will be commenced in Canada, the United States and Europe.
Mr. Dumoulin-White concluded that, “The Company looks forward to final approval of the ITA by Health Canada, allowing the Company to commence a Phase Ib clinical study for NMIBC. This will allow the Company to dramatically increase shareholder value in 4Q2016 by demonstrating the safety, tolerability and as an exploratory outcome measure efficacy of its next generation anti-cancer technology.”
About Theralase Technologies Inc.
Theralase Technologies Inc. (“Theralase®” or the “Company”) (TSXV: TLT) (TLTFF: OTC) in its Therapeutic Laser Technology (“TLT”) Division designs, manufactures, markets and distributes patented super-pulsed laser technology indicated for 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 are able to localize to cancer cells and then when laser light activated, effectively destroy them.
Additional information is available at www.theralase.com and www.sedar.com .
This press release contains forward-looking statements, which reflect the Company’s current expectations regarding future events. The forward-looking statements involve risks and uncertainties. Actual results could differ materially from those projected herein. The Company disclaims any obligation to update these forward-looking statements.
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.
For More Information:
Roger Dumoulin-White
President & CEO
1.866.THE.LASE (843-5273) ext. 225
416.699.LASE (5273) ext. 225