Theralase Releases Third Quarter 2019 Financial Results and Company Update
TORONTO, ON/ November 29, 2019 / Theralase® Technologies Inc. (“Theralase” or “Company“) (TSXV:TLT)(OTCQB:TLTFF), a clinical stage pharmaceutical company focused on 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 for the nine-month period ended September 30, 2019.
|Condensed Consolidated Statements of Operations (Unaudited)||
Three-Month Ended Sep 30
Nine-Month Ended Sep 30
|In Canadian Dollars||2019||2018||2019||2018|
|Cost of sales||$106,396||$126,975||$374,040||$559,296|
|As percentage of revenue||26%||65%||27%||56%|
|Loss per share||($0.01)||($0.006)||($0.03)||($0.02)|
Total revenue for the nine-month period ended September 30, 2019 decreased to $514,891 from $1,276,630 for the same period in 2018, a 60% decrease. In Canada, revenue decreased 44% to $477,502 from $847,870. In the US, revenue decreased 91% to $23,926 from $253,742 and international revenue decreased 92% to $13,463 from $175,018. The decrease in total revenue in 2019 is primarily 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 nine-month period ended September 30, 2019 was $374,040 (73% of revenue) resulting in a gross margin of $140,851 or 27% of revenue, compared to a cost of sales of $559,296 (44% of revenue) in 2018, resulting in a gross margin of $717,334 or 56% 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 decrease, year over year, is attributed to decreased sales and fixed production salaries for the TLC-1000 and TLC-2000 product lines.
For the nine-month period ended September 30, 2019, selling and marketing expenses decreased to $505,914 or 98% of sales, from $673,814 or 53% of sales in 2018, a 25% decrease. The decrease in selling and marketing expenses is primarily due to the restructuring of the sales and marketing departments, resulting in the termination of certain sales and marketing personnel.
Administrative expenses for the nine-month period ended September 30, 2019 increased to $1,798,682 from $1,400,207 in 2018, representing a 28% increase. The increase in administrative expenses is primarily due to increased spending on administrative salaries (87%) and director and advisory fees (319%).
Net research and development expenses for the nine-month period ended September 30, 2019 increased to $2,231,054 from $1,266,839 in 2018, representing a 76% increase.
Increases in research and development expenses are primaily due to:
- Increased expenses for the Anti Cancer Technology (“ACT“) Non-Muscle Invasive Bladder Cancer (“NMIBC“) Phase II study (“Study II“).
- Development of the TLC-2000 laser system.
Research and development expenses represented 58% of the Company’s operating expenses for the nine-month period ended September 30, 2019 and represented investment into the research and development of the Company’s ACT technology.
The net loss for the nine-month period ended September 30, 2019 was $4,399,045, which included $331,830 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 $2,612,168, which included $155,265 of net non-cash expenses. The ACT division represented $2,558,002 of this loss (58%) for the nine-month period ended September 30, 2019.
The decrease in net loss is primarily due to the following:
- Increased investment in research, development and clinical expense of Study II.
- Decreased sales of the TLC-1000 and TLC-2000.
- Study II progress. Theralase is conducting a Study II with 3 Canadian study sites open for patient enrollment and treatment, specifically, University Health Network (“UHN“), London Health Science Centre (“LHSC“), and McGill University Health Centre (“MUHC“). To date, 4 patients have been treated at UHN and 1 patient treated at MUHC.
- Scientific and clinical recognition. Theralase affiliated researches through peer reviewed publications and presentations presented in association with prominent scientific and clinical organizations support the safety, efficacy and robustness of Theralase’s technology and the clear advantages of using TLD-1433 for treating NMIBC. The success of Theralase’s Phase Ib NMIBC clinical study is a concrete example that Photo Dynamic Therapy (“PDT“) metal based PDCs can become a viable option for treating various cancers.
- Onboarding additional study sites. The Company has three additional clinical study sites located in Canada that are at various stages of the on-boarding process. Under the agreement with the urology Trial Management Organization (“TMO“), the Company will start enrolling and treating patients in the US, subject to the U.S. Food and Drug Administration (“FDA“) Investigational New Drug (“IND“) approval. The Company plans to launch a total of approximately 20 study sites in Canada and US.
- FDA IND Status. On November 25, 2019, Theralase received a letter from the FDA placing the IND on Full Clinical Hold pending resolution of specific deficiencies identified in the letter. Theralase is currently addressing these deficiencies and expects to provide the FDA with a Clinical Hold Complete Response prior to December 31, 2019 for review by the FDA. Subject to FDA review and approval of the Clinical Hold Complete Response, Theralase should be in a position to receive FDA IND approval in early 2020.
- Opening investigation of an additional cancer indication. Theralase’s Ruthenium-based TLD-1433 PDCs has been proven to be effective in pre-clinical animal studies for various cancer indications. When Study II is well underway; with the majority of study sites open and recruiting patients, the Company expects to expand the breadth of indications by investigating an additional cancer indication in a Phase Ib human clinical study.
- Potential for accerated FDA approval. If the Company is able to duplicate the efficacy results observed in the Phase Ib NMIBC clinical study (67% Complete Response) at an interim analysis when approximately 20 to 25 patients have been enrolled and treated, Theralase plans to submit the interim analysis to the FDA to review the results, with a focus on obtaining accelerated approval for market commercialization of the Company’s ACT treatment.
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