Toronto, Ontario – May 30, 2017
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 three-month period ended March 31, 2017, total revenue increased to $507,428 from $411,448 for the same period in 2016, a 23% increase.
In Canada, revenue increased 79% to $322,186 from $180,069 In the US, revenue decreased 7% to $141,714 from $152,375 and international revenue decreased 45% to $43,528 from $79,004. The increase in Canadian revenue in 2017 and the corresponding decrease in US and international revenue is attributable to the Company experiencing slower than expected sales growth of the TLC-2000 in 2016 and 1Q2017, systematically building its sales and marketing teams in the Canadian and then the US market, the learning curves associated with training and developing a new sales force in both jurisdictions and the ramp-up strategy of successfully commercializing the TLC-2000 therapeutic laser system.
The Company has experienced slower than expected sales growth of the TLC-2000, has not achieved sales revenue guidance of $5 M in 2016, is not expected to achieve sales revenue guidance of $10 M in 2017 or the forward looking target of $50 million within 5 years of launch.
The Company plans on optimizing the TLC-2000 technology in 2017 and 2018 to increase the revenue opportunities afforded to the technology through a “successful commercial launch of the TLC-2000” by:
- Redesigning the TLC-2000 software, firmware and hardware to allow the implementation of a “recurring revenue model” and large scale commercial distribution, not expected to be completed until 2018.
- Submit regulatory submissions to Health Canada and the FDA to expand the scope of the current clearances, beyond chronic knee pain, which if successful, is not expected to be completed until 2018.
Cost of sales for the three-month period ended March 31, 2017 was $207,237 (41% of revenue) resulting in a gross margin of $300,191 or 59% of revenue, compared to a cost of sales of $131,764 (32% of revenue) in 2016, resulting in a gross margin of $279,684 or 68% 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.
Cost of sales increased primarily by the retention of external engineering teams in order to optimize the TLC-2000 therapeutic laser system software and firmware to support the Company’s mandate of successfully commercializing the TLC-2000.
Selling and marketing expenses for the three-month period ended March 31, 2017 were $410,979 representing 81% of sales, compared with $316,254 or 77% of sales in 2016.
The increase is primarily due to increased spending in marketing and sales personnel, which should augment sales in future financial quarters, potentially aiding in future sales of the TLC-2000. Selling expenses are expected 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 potentially increase revenues in subsequent financial quarters.
Administrative expenses for the three-month period ended March 31, 2017 were $700,924 representing a 12% increase from $623,314 in 2016.
Increases in administrative expenses are attributed to the following:
- Insurance expenses increased 27% due to increased product liability coverage
- General and administrative expenses increased by 65%, as a result of increased recruiting fees for sales personnel and regulatory licensing fees.
- Administrative salaries increased by 15%, as a result of hiring clinical and educational staff.
Gross research and development expenses totaled $668,723 for the three-month period ended March 31, 2017 compared to $477,588 in 2016 (40% increase). The increase in research and development expenses is primarily a result of the ongoing Phase Ib clinical trial for NMIBC, as well as investment into redesigning the TLC-2000 therapeutic laser system. Research and development expenses represented 38% of the Company’s operating expenses for the year and represent direct investment into the research and development expenses of the TLC-3000 anti-cancer technology and TLC-2000 therapeutic laser system.
The net loss for the three-month period ended March 31, 2017 was $1,472,184, which included $141,381 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 2016 of $1,145,739, which included $171,879 of net non-cash expenses.
The PDT division represented $697,207 of this loss (57%).
The increase in net loss is primarily due to increased investment in research and development of the TLC-3200 Medical Laser and TLC-3400 Dosimetry Fibre Optic Cage (“DFOC”) related to the support of a Phase Ib clinical study for NMIBC and sales, marketing and administrative personnel initiatives, related to achieving the successful commercialization of the next generation TLC-2000 therapeutic medical laser system and the successful launch of its recurring revenue model.
The PDT division is focused on successfully completing a Phase Ib clinical trial for patients afflicted with NMIBC, utilizing its novel next generation light-activated, anti-cancer drug, TLD-1433.
The Phase Ib clinical trial has been designed as follows:
Lead Institution:
Princess Margaret Cancer Centre, University Health Network (“UHN”)
Lead Clinical Principal Investigator:
Girish Kulkarni MD
Title:
A Phase Ib Trial of Intravesical Photodynamic Therapy in Patients with Non-Muscle Invasive Bladder Cancer at High Risk of Progression Who are Refractory to Therapy with Bacillus Calmette-Guerin (“BCG”) and Who are Medically Unfit for or Refuse a Cystectomy
Objectives:
Primary: Evaluate the safety and tolerability of PDT employing TLD-1433 and controlled uniform laser light (TLC-3200 System) in subjects with high risk, Ta/T1 or Tis NMIBC that are intolerant or refractory to BCG, and who are not candidates or refuse radical cystectomy
Secondary: Evaluate the pharmacokinetics (“PK”) (movement and exit of drug within tissue) of TLD-1433
Exploratory: Efficacy of PDT employing TLD-1433 and controlled uniform laser light (TLC-3200 System)
Methodology:
Phase Ib, open-label, single-arm, single-center study conducted in Canada. BCG intolerance or refractory disease are defined as inability to tolerate or failure to achieve a tumour-free state after at least one induction (a minimum of 5 instillations) followed by either a second induction (a minimum of 5 instillations) or at least 2 maintenance instillations. Subjects experiencing disease relapse within 12 months or less after finishing the second course of BCG therapy are also considered refractory. 2 phases: In the first phase, 3 subjects will receive PDT (TLC-3200 System) employing 0.35 mg/cm2 (maximum recommended starting dose) TLD1433. If treatment with the maximum recommended starting dose does not raise significant safety concerns, as determined by the safety monitoring committee, an additional 6 subjects will receive PDT with 0.70 mg/cm2 (therapeutic dose) TLD1433
NMIBC PDT Treatment:
- Intravesically instill a sterile water based solution of TLD-1433 via catheter, through the urethra, into the bladder of a patient inflicted with NMIBC, who has failed standard of care and who is not indicated or refuses to have their bladder removed
- Allow the solution of TLD-1433 to absorb into any resident bladder cancer tumours for approximately sixty (60) minutes
- Void the bladder and flush the bladder with sterile water to remove any non-adhering TLD-1433 solution not absorbed by any bladder tumours
- Admit the patient into the operating room and administer a general anesthetic
- Insert a rigid cystoscope through the urethra of the patient into the bladder
- Fill the bladder with sterile water to provide shape to the bladder
- Insert the TLC-3400 DFOC device into the bladder via the cystoscope’s working channel and connect it to the TLC-3200 Medical Laser System
- Deploy the DFOC in the bladder (like an umbrella) to strategically place optical detectors at approximately twelve (12) predetermined locations along the bladder wall to monitor the laser light, intended to provide a uniform distribution of laser light energy, in the correct dosage, to the bladder wall
- Activate PDC for approximately thirty (30) to one hundred and twenty (120) minutes
- Void bladder to remove sterile water
The TLC-3200 Medical Laser System delivers green laser light, at a wavelength of 525 nanometers (“nm”), while the Dosimetry Fibre Optic Cage (“DFOC”) technology monitors the laser light to provide a uniform distribution of the laser light energy, in the correct dosage, to the bladder wall.
The Phase Ib NMIBC clinical study protocol commenced by instilling a low dose of TLD-1433 PDC into the bladders of three (3) patients with subsequent light activation using the TLC-3200 medical laser. These patients were treated on March 30, 2017, April 12, 2017 and April 18, 2017.
These three (3) patients were monitored for thirty (30) days post-procedure to ascertain achievement of the primary objective of safety and tolerability and the secondary objective of pharmacokinetics. If no Significant Adverse Events (“SAEs”) or severe Adverse Events (“AEs”) are reported, then an additional six (6) patients would be enrolled at a therapeutic dose, followed by light activation and follow-up monitoring for six (6) months.
On May 26, 2017, Theralase announced that the independent Data and Safety Monitoring Board (“DSMB”) unanimously decided that the primary and secondary objectives for the first part of the Phase Ib NMIBC clinical study (“Study”) have successfully been met.
Princess Margaret Cancer Centre, University Health Network (“UHN”), in accordance with the DSMB’s decision, is now recommended to enroll an additional six patients for the second part of the Study, treating them at a therapeutic dose of the PDC (0.70 mg/kg) for NMIBC using its novel PDT technology.
The DSMB is comprised of three highly regarded, independent uro-oncologists; specifically: Dr. Laurence Klotz of Sunnybrook Health Sciences Centre, Dr. Nathan Perlis of the University of Toronto and Dr. Alexandre Zlotta of Mount Sinai Hospital.
The clinical data on the first three patients was presented by Dr. Michael Jewett, Chair of the Medical and Scientific Advisory Board (“MSAB”).
The DSMB members have unanimously recommended that the first three patients enrolled and treated in the Study successfully achieved the primary and secondary endpoints of the Study and an additional six patients are now eligible to be enrolled into the Study to be treated at a therapeutic dose of the PDC and monitored for 180 days, according to the endpoint criteria.
If safety and tolerability of the procedure is demonstrated in all nine (9) patients, the Phase Ib study results will support Health Canada approval and a Phase II multi-center efficacy study for NMIBC will be commenced in Canada and the United States.
Theralase’s anti-cancer technology pipeline includes numerous highly effective drug candidates, in various advanced stages of preclinical development. Theralase will continue to validate its extensive data with additional cancer animal models and toxicology analyses to bring these PDC drug candidates online for various cancer and bacterial applications.
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 treatment of chronic knee pain and in off-label use 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 news release contains “forward-looking statements” which reflect the current expectations of management of the Corporation’s future growth, results of operations, performance and business prospects and opportunities. Such statements include, but are not limited to, statements regarding the proposed use of proceeds.. 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. Many factors could cause the Corporation’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 Corporation 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 Corporation cannot assure prospective investors that actual results, performance or achievements will be consistent with these forward-looking statements. The Corporation 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.
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For More Information:
Roger Dumoulin-White
President & CEO
1.866.THE.LASE (843-5273) ext. 225
416.699.LASE (5273) ext. 225