Theralase Releases Second Quarter 2019 Financial Results and Company Update
TORONTO, ON/ August 29, 2019/ Theralase® Technologies Inc. (“Theralase” or “Company“) (TSXV: TLT) (OTCQB: 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 various cancers, today released financial results and the Management Discussion and Analysis (“MD&A“) at and for the six-months period ended June 30, 2019.
|Condensed Consolidated Statements of Operations (Unaudited)||Three-Month Ended June 30||Six-Month Ended June 30|
|In Canadian Dollars||2019||2018||2019||2018|
|Cost of sales||$183,393||$189,464||$267,644||$432,321|
|As percentage of revenue||26%||60%||28%||47%|
|Loss per share||($0.01)||($0.01)||($0.02)||($0.01)|
Total revenue for the six-month period ended June 30, 2019 decreased to $370,437 from $910,690 for the same period in 2018, a 59% decrease. The decrease in total revenue in 2019 is due to the restructuring of the sales and marketing departments resulting in the termination of certain sales and marketing personnel.
Cost of sales for the six-month period ended June 30, 2019 was $267,644 (72% of revenue) resulting in a gross margin of $102,792 or 28% of revenue, compared to a cost of sales of $432,321 (47% of revenue) in 2018, resulting in a gross margin of $478,369 or 53% of revenue. The gross margin as a percentage of sales decrease, year over year, is attributed to decreased sales and fixed production salaries for the TLC-1000 and TLC-2000 product lines.
For the six-month period ended June 30, 2019, selling and marketing expenses decreased to $344,501 or 93% of sales, from $499,204 or 55% of sales in 2018, a 31% 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, 2019 decreased to $1,062,087 from $1,143,191 in 2018, representing a 7% decrease. Decreases in administrative expenses are attributed to the decreased spending on professional fees (61%) due to reduced spending on legal fees as a result of the OSC settlement.
Research and development expenses for the six-month period ended June 30, 2019 increased to $1,303,375 from $730,104 in 2018, a 79% increase. The increase is primarily due to increased expenses for commencing Phase II Non-Muscle Invasive Bladder Cancer (“NMIBC”) Clinical Study (“Study II”). Research and development expenses represented 50% of the Company’s operating expenses for the six-month period ended June 30, 2019 and represent investment into the research and development of the Company’s Anti-Cancer Technology (“ACT”).
The net loss for the six-month period ended June 30, 2019 was $2,612,268 which included $187,941 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 2018 of $1,889,351, which included $155,265 of net non-cash expenses.
The ACT division represented $1,459,713 of this loss (56%) for the six-month period ended June 30, 2019. The increase in net loss is primarily attributed to the following:
- Increased investment in research and development in the NMIBC Study II.
- Decreased sales of the TLC-1000 and TLC-2000.
- Oversubscribed Prospectus Offering. The Company has successfully completed an oversubscribed marketed public offering (“Offering”) on August 22, 2019, raising gross proceeds of CAD $17,250,000. Use of proceeds of the Offering are intended for: advancing the NMIBC Study II, optimization of the TLC-2000 therapeutic laser system, working capital and general business purposes.
- Successful Phase Ib NMIBC Clinical Study. Theralase’s Phase Ib NMIBC clinical study successfully achieved the primary endpoint of safety and tolerability, secondary endpoint of pharmacokinetics, and exploratory endpoint of efficacy. The study results have shown a strong efficacy signal with a 66% Complete Response (“CR”) in the Therapeutic Dose Group (0.70 mg/cm2) after only a single PhotoDynamic Therapy (“PDT”) treatment, with patients five and six demonstrating cancer-free status with no presence, recurrence or progression of the disease, 360 days post treatment. Further, patient five has demonstrated an extended cancer-free status for 18 months post treatment.
- Study II Launch. The commencement of Study II is underway with the first patient enrolled and ready to be treated at the Company’s lead study site, University Health Network (“UHN”). Additionally, McGill University Health Centre (“MUHC”) is added as another study site, subject to a Site Initiation Visit (“SIV”) tentatively scheduled for early September, 2019. Through the agreement with the US uro-oncology Trial Management Organization (“TMO”), the Company is planning to onboard up to 6 US based clinical study sites and is diligently working to bring approximately 20 clinical sites on board.
- FDA compliance. In June 2019, FDA confirmed in the Pre-Investigational New Drug (“IND”) conference call, that Theralase’s protocol design for Study II is aligned with the industry guidelines (February, 2018) for Bacillus Calmette Guerin (“BCG”)-unresponsive NMIBC.
Shawn Shirazi, Ph.D., CEO of Theralase – Drug Division stated that, “With the first patient soon to be treated, we are very excited to advance our Phase II NMIBC Clinical Study, as it allows the Company to potentially commercialize this groundbreaking technology for patients afflicted with this devastating disease. The Company now has all the characteristics of other successful biotech companies such as: cutting-edge technology, an experienced management team, and sufficient capitalization to successfully execute on the Company’s strategic initiatives.”
Kipton Lade, CEO of Theralase – Device Division stated that, “With the completion of this most recent round of financing, Theralase is poised to accelerate execution on the Company’s key strategic objectives, such as successful completion of Study II and commercialization of our NMIBC anti-cancer technology.”
About Study II:
The Phase II NMIBC Clinical Study will utilize the Therapeutic Dose (0.70 mg/cm2) of TLD-1433, focusing on the treatment of approximately 100 BCG-Unresponsive NMIBC patients presenting with Carcinoma In-Situ (“CIS”) in approximately 20 clinical study sites located in Canada and the US, with a primary endpoint of efficacy (measured by CR) and a secondary endpoint of duration of CR and a tertiary endpoint of safety.
The primary and secondary endpoint will be evaluated by:
CR in patients with CIS with resected papillary disease at any time point post-treatment with a duration of CR evaluated at approximately 360 days post-treatment.
Patient CR is defined as one of the following (no cancer detected in bladder):
- Negative cystoscopy and negative (including atypical) urine cytology (no cancer detected in urine)
- Positive cystoscopy (cancer detected in bladder) with biopsy-proven benign or low-grade NMIBC
- Negative cystoscopy with malignant urine cytology (no cancer detected in urine), if cancer is found in the upper tract or prostatic urethra and random bladder biopsies are negative
The tertiary endpoint will be evaluated by:
Incidence and severity of Adverse Events (“AEs”) Grade 4 or higher that do not resolve within 360 days post-treatment; whereby: Grade 1 = Mild, Grade 2 = Moderate, Grade 3 = Severe, Grade 4 = Life-threatening or disabling, Grade 5 = Death
About Theralase® Technologies Inc.
Theralase® is a clinical stage pharmaceutical company dedicated to the research and development of light activated Photo Dynamic Compounds and their associated drug formulations intended to safely and effectively destroy various cancers.
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 proposed development plans with respect to Photo Dynamic Compounds and their drug formulations. 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: adequately fund, secure the requisite regulatory approvals to commence and successfully complete a Phase II NMIBC clinical study in a timely fashion and implement its development plans. 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 press 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.
For More Information:
Shushu Feng, Investor Relations & Public Relations Coordinator
Amelia Tudo, Investor Relations & Public Relations Coordinator