Toronto, Ontario – August 29th, 2023, Theralase® Technologies Inc. (“Theralase®” or the “Company”) (TSXV: TLT) (OTCQB: TLTFF), a clinical stage pharmaceutical company dedicated to the research and development of light activated Photo Dynamic Compounds (“PDCs”), their associated drug formulations and the light systems that activate them, intended to safely and effectively destroy various cancers has released the Company’s 2Q2023 unaudited condensed interim consolidated Financial Statements (“Financial Statements”).
Financial Summary:
For the six-month period ended June 30th:
| Audited Consolidated Statements of Operations(In Canadian Dollars) | 2023 | 2022 | % Change |
| Revenue | |||
| Canada | 305,666 | 426,990 | -28% |
| United States | 120,421 | 125,452 | -4% |
| Total Revenue | 426,087 | 552,442 | -23% |
| Cost of Sales | 224,947 | 271,656 | -17% |
| Gross Margin | 201,140 | 280,786 | -28% |
| Gross Margin (% of revenue) | 47% | 51% | |
| Operating Expenses | |||
| Selling Expenses | 147,304 | 167,139 | -12% |
| Administrative Expenses | 1,010,144 | 734,081 | 38% |
| Research and Development Expenses – Device Division | 25,163 | 105,353 | -76% |
| Research and Development Expenses – Drug Division | 1,594,676 | 2,233,502 | -29% |
| Other 1 | (11,960) | (12,121) | -1% |
| Total Operating Expenses | 2,765,327 | 3,227,954 | -14% |
| Net Loss | (2,564,187) | (2,947,168) | -13% |
Financial Highlights:
Total revenue decreased 23%, year over year.
Cost of sales for the six-month period ended June 30th, 2023 was $224,947 or 53% of revenue resulting in a gross margin of $201,140 or 47% of revenue. In comparison, the cost of sales for the same period in 2022 was $271,656 or 49% of revenue resulting in a gross margin of $280,786 or 51% 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 gross margin decrease, as a percentage of sales, year over year, is primarily attributed to an increase in material costs.
Selling expenses for the six-month period ended June 30th, 2023 decreased to $147,304, from $167,139 for the same period in 2022, a 12% decrease. The decrease in selling expenses is a result of reduced commissions (22%), advertising (14%) and salaries (10%).
Administrative expenses for the six-month period ended June 30th, 2023, increased to $1,010,144 from $734,081 for the same period in 2022, a 37% increase. The increase in administrative expenses is primarily attributed to increased spending on general and administrative expenses (71%) and advisory fees (73%). Stock based compensation expense increased 278% in 2022 due to an increase in stock options granted.
Net research and development expenses for the six-month period ended June 30th, 2023, decreased to $1,619,839 from $2,338,855 for the same period in 2022, a 31% decrease. The decrease in research and development expenses for the six-month period is primarily attributed to the costs related to the manufacture of the Study II Drug. Research and development expenses represented 73% of the Company’s operating expenses and represent investment into the research and development of the Company’s Drug Division Anti-Cancer Therapy (“ACT”) technology.
The net loss for the six-month period ended June 30th, 2023, was $2,564,187, which included $474,558 of net non-cash expenses (i.e.: amortization, stock-based compensation expense and foreign exchange gain/loss). This compared to a net loss for the same period in 2022 of $2,947,168 which included $254,616 of net non-cash expenses. The Drug Division represented $2,187,284 of this loss (85%) for the six-month period ended June 30th, 2023. The decrease in net loss is primarily attributed to decreased spending on research and development expenses in Study II.
Operational Highlights:
Leadership Change
On May 24th, 2023, Roger DuMoulin-White, B.Sc., P.Eng., Pro. Dir. was appointed President and Chief Executive Officer (“CEO”) of the Company.
Dr. Arkady Mandel, MD, PhD, DSc tendered his resignation as Interim CEO and continues to serve as Chief Scientific Officer (“CSO”) and as a member of Theralase®’s Board.
Mr. DuMoulin-White is the founder of Theralase® and it’s former President and CEO. He stepped down as President and CEO in 2018 and has since served in a non-executive business development role. Mr. DuMoulin-White was the subject of a voluntary Settlement Agreement with the Ontario Securities Commission (“OSC”) dated February 16th, 2018 and an OSC Order dated February 26th, 2018 which required, among other things, that he resign as a director and officer of Theralase® and refrain from holding those positions for a period of five years. That period has expired and Theralase® has obtained the approval of the Toronto Stock Venture Exchange (“TSXV”) to appoint Mr. DuMoulin-White as President and CEO of the Company and to nominate him for election to the Company’s Board of Directors at the Company’s Annual Meeting on June 29, 2023.
On June 6th, 2023, Ms. Kaouthar Lbiati, M.D., M.Sc. was appointed a director of the Company. Dr. Lbiati is an internationally trained medical doctor, who utilizes her extensive clinical and business background to assist biopharmaceutical organizations to achieve their strategic objectives through: systematic achievement of their value inflection milestones, partnering of their promising drug candidates with large international pharmaceutical companies and ultimately increasing shareholder value.
On June 29th, 2023, Mr. DuMoulin-White was appointed a director of the Company.
TSX Venture 50TM
Theralase® was named to the Toronto Stock Exchange Venture (“TSXV”) “2023 Venture 50™”. The Venture 50™ is an annual ranking of the top-performing companies from five industry sectors; specifically: Clean Technology and Life Sciences, Diversified Industries, Energy, Mining and Technology. Theralase® was recognized in the Clean Technology and Life Sciences category. Theralase® was previously named a 2015, 2019 and 2020 Venture 50™ company making this the fourth year Theralase® has been recognized as a top performer in the Clean Technology and Life Sciences sector in the last 8 years.
Non-Brokered Private Placement
On June 30th, 2023, the Company completed a financing by way of a non-brokered private placement, where 4,800,000 units were issued at a price of $0.25 per unit for gross proceeds of $1,200,000. Each unit consisted of 1 common share and 1 non-transferable common share purchase warrant. Each whole warrant entitles the holder thereof to acquire 1 common share at a price of $0.35, expiring on June 30th, 2025. An aggregate of 1,110,000 Units, representing gross proceeds of $277,500, were issued to certain insiders of the Corporation.
Warrant Extension
On January 5th, 2023, the Company extended the expiry date of 4,095,157 share purchase warrants, all of which are exercisable at $0.50 per share. The share purchase warrants were issued on January 9th, 2019 pursuant to a private placement involving the issuance of 4,095,157 units of the Company. The new expiry date of the warrants is January 9th, 2024.
Break Through Designation Update
In 2020, the FDA granted Theralase® Fast Track Designation (“FTD”) for Study II. As a Fast Track designee, Theralase® has access to early and frequent communications with the FDA to discuss Theralase®’s development plans and ensure the timely collection of clinical data to support the approval process. The accelerated communication with the FDA potentially allows, the Study II Treatment, to be the first intravesical, patient-specific, light-activated, Ruthenium-based PDC for the treatment of patients diagnosed with BCG-Unresponsive NMIBC CIS, (with or without recurrent / resected papillary Ta/T1 tumours). FTD can also lead to Break Through Designation (“BTD”), Accelerated Approval (“AA”) and/or Priority Review, if certain criteria are met, which the FDA has previously defined to the Company for BTD as clinical data on approximately 20 to 25 patients enrolled and provided the primary Study II Treatment, who demonstrate significant safety and efficacy clinical outcomes.
In 2021, Theralase® completed its first significant milestone of Study II by enrolling and treating (primary Study Treatment) 25 patients.
In 2022, Theralase® completed its second significant milestone of Study II by enrolling and treating (primary Study Treatment) 50 patients.
The Company has submitted a pre-BTD submission to the FDA and based on the FDA’s feedback, the Company is currently working with the CSSs, a biostatistics organization and a regulatory organization to update the pre-BTD with clinical data clarifications identified by the FDA. The Company plans to resubmit the pre-BTD submission to the FDA in late 3Q2023 / early 4Q2023 for FDA review of these clarifications. Once the pre-BTD submission has been accepted by the FDA, the Company plans to compile a BTD submission for review by the FDA in support of the grant of a BTD approval in 4Q2023.
Study II Preliminary Clinical Data:
To date, Study II has provided the primary study treatment for 60 patients.
Performance to Primary, Secondary and Tertiary Objectives
Study II Clinical Data Based on Assessment Visit
The interim clinical data demonstrates that at the 90 Day Assessment 58% of Evaluable Patients (achieved a CR and 65% achieved a Total Response (CR + IR) post primary Study II Treatment and at 450 days 33% achieved a CR and 38% achieved a TR.
Study II Clinical Data Based on Assessment Visit for Patients Treated with the Optimized Study II Treatment (Post August 1, 2020)
The interim clinical data demonstrates that at the 90 Day Assessment 64% of Evaluable Patients achieved a CR and 71% achieved a Total Response (CR + IR) post primary Study II Treatment with the Optimized Study II Treatment and at 450 days 34% achieved a CR and 41% achieved a TR.
Note:
- For patients to be included in the statistical clinical analysis they must be enrolled in Study II, provided the primary Study II Treatment and evaluated by a PI at the 90 day assessment visit (cystoscopy and urine cytology)
- One patient passed away prior to their 90 day assessment and is therefore not included in the statistical analysis; therefore, there are 59 patients that have been statistically analyzed.
- Evaluable Patients are defined as patients who have been evaluated by a PI and thus excludes a patient’s clinical data at specific assessment days, if that clinical data is pending.
- Three patients have been enrolled and provided the primary Study II Treatment, but have not been evaluated at their 90 day assessment; therefore, 57 patients are considered Evaluable Patients at 90 days, with 39 patients considered Evaluable Patients at 450 days.
- The data analysis presented above, should be read with caution, as the clinical data is interim in its presentation, as Study II is ongoing and new clinical data collected may or may not continue to support the current trends, with significant data still pending.
- For patients who have been removed from the study by the PI or have elected to discontinue from the clinical study their Last Observation Carried Forward (“LOCF”) has been used in this statistical analysis.
Patient Response Chart
The Swimmer’s plot below is a graphical representation of the interim clinical results (n=59) graphically demonstrating a patient’s response to a treatment over time. As can be seen in the plot, clinical data is still pending for patients, who have demonstrated an initial CR at 90 days and continue to demonstrate a duration of that response.
Swimmer’s Plot:
The Swimmer’s Plot illustrates:
- 13 Evaluable Patients that achieved CR at each assessment date and thus achieved the primary and secondary objectives of Study II for all patients assessed up to 450 days (13/39 = 33%).
- 36 Evaluable Patients that achieved CR on at least one assessment date and thus achieved the primary objective of Study II (36/57 = 63%)
Kaplan-Meier Curve
The Kaplan-Meier (“KM”) Curve represents the interim cumulative incidence of clinical events, including the treatment efficacy, occurring over prespecified time in Study II.
According to the interim clinical data in the KM curve:
- Approximately 80% of patients remained in Study II after 90 days, following the initial Study II Treatment.
- 39% of Total Response patients have a duration of response ? 450 days.
- 28% of Complete Response patients have a duration of response ? 450 days.
Serious Adverse Events
For 60 patients treated in Study II, there have been 9 Serious Adverse Events (“SAEs”) reported:
- 1 – Grade 1 (resolved within 1 day)
- 2 – Grade 2 (resolved within 1 and 1 days, respectively)
- 3 – Grade 3 (resolved within 5, 80 and 107 days, respectively)
- 2 – Grade 4 (resolved within 6 and 8 days, respectively)
- 1 – Grade 5
Theralase® believes all SAEs reported to date are unrelated to the Study II Drug or Study II Device, as reviewed and confirmed by the independent Data Safety Monitoring Board (“DSMB”).
Note: A SAE is defined as any untoward medical occurrence that at any dose: Is serious or life-threatening, requires inpatient hospitalization or prolongation of existing hospitalization, results in persistent or significant disability/incapacity, is a congenital anomaly/birth defect or results in death.
About Study II:
Study II utilizes the therapeutic dose of the patented Study II Drug ( “RuvidarTM” or “TLD-1433”) (0.70 mg/cm2) activated by the proprietary Study II Device (TLC-3200 Medical Laser System or “TLC-3200”). Study II is focused on enrolling and treating approximately 100 BCG-Unresponsive NMIBC Carcinoma In-Situ (“CIS”) patients in up to 15 Clinical Study Sites (“CSS”) located in Canada and the United States.
About RuvidarTM:
RuvidarTM is a patented PDC with 12 years of published peer reviewed preclinical research and is currently under investigation in Study II.
About Theralase® Technologies Inc.
Theralase® is a clinical stage pharmaceutical company dedicated to the research and development of light activated compounds and their associated drug formulations with a primary objective of efficacy and a secondary objective of safety in the destruction of various cancers, bacteria and viruses.
Additional information is available at www.theralase.com and www.sedar.com
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward Looking Statement
This news release contains “forward-looking statements” within the meaning of applicable Canadian securities laws. 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 and a COVID-19 vaccine. Forward looking statements may be identified by the use of the words “may, “should“, “will“, “anticipates“, “believes“, “plans“, “expects“, and similar expressions including statements related to the current expectations of Company’s management for future research, development and commercialization of the Company’s COVID vaccine, including preclinical research, clinical studies and regulatory approvals.
These statements involve significant risks, uncertainties and assumptions; including, the ability of the Company to: adequately fund, and secure the requisite regulatory approvals to successfully complete clinical studies for a COVID-19 vaccine in a timely fashion and implement its development plans. Other risks include: the ability of the Company to successfully commercialize its drug formulations, the risk that access to sufficient capital to fund the Company’s operations may not be available or may not be available on terms that are commercially favorable to the Company, the risk that the Company’s drug formulations may not be effective against the diseases tested in its clinical studies, the risk that the Company’s fails to comply with the term of license agreements with third parties and as a result loses the right to use key intellectual property in its business, the Company’s ability to protect its intellectual property, the timing and success of submission, acceptance and approval of regulatory filings, and the impacts of public health crises, such as COVID-19. Many of these factors that will determine actual results are beyond the Company’s ability to control or predict.
Readers should not unduly rely on these forward- looking statements which are not a guarantee of future performance. There can be no assurance that forward looking statements will prove to be accurate as such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results or future events to differ materially from 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.
All forward-looking statements are made as of the date hereof and are subject to change. Except as required by law, the Company assumes no obligation to update such statements.
For More Information:
1.866.THE.LASE (843-5273)
416.699.LASE (5273)
www.theralase.com
Kristina Hachey, CPA
Chief Financial Officer
khachey@theralase.com
416.699.LASE (5273) x 224