Toronto, Ontario – November 29, 2018
“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”) and their associated drug formulations intended to safely and effectively destroy cancer released its 3Q2018 financial statements.
Total revenue for the nine-month period ended September 30, 2018 decreased to $1,276,630 from $1,354,254 for the same period in 2017, a 6% decrease. In Canada, revenue decreased 19% to $847,870 from $1,046,508. In the US, revenue decreased 7% to $253,742 from $272,305 and international revenue increased 393% to $175,018 from $35,441. The increase in international revenue in 2018 and the corresponding decrease in Canadian and US revenue is attributable to the Company hiring an International Sales Manager and restructuring the Canadian and US sales and marketing departments.
Cost of sales for the nine-month period ended September 30, 2018 was $559,296 (44% of revenue) resulting in a gross margin of $717,334 or 56% of revenue, compared to a cost of sales of $558,221 (41% of revenue) in 2017, resulting in a gross margin of $796,033 or 59% 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 increase, year over year, is attributed to discounted sales pricing for the TLC-1000 and TLC-2000 product line.
For the nine-month period ended September 30, 2018, selling and marketing expenses decreased to $673,814 or 53% of sales, from $1,407,387 or 104% of sales in 2017, a 52% 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 and decreased spending in advertising.
Administrative expenses for the nine-month period ended September 30, 2018 decreased to $1,400,207 from $2,222,701 in 2017, representing a 38% decrease.
Decreases in administrative expenses are attributed to the following:
- • Administrative salaries decreased by 39% due to the termination and/or resignation of certain administrative staff.
- • Stock based compensation decreased 70% due to certain current employees forfeiting all non-vested and non-exercised stock options totaling 4,300,000 and certain terminated or resigned employees forfeiting all non-vested and non-exercised options totaling 240,000.
- • General and administrative expenses decreased 28% due to decreased investment in investor relations and recruiting expenses
Net research and development expenses for the nine-month period ended September 30, 2018 decreased to $1,266,839 from $2,044,838 in 2017, representing a 38% decrease. Decreases in research and development expenses are attributed to the following:
- • Decreased expenses for conducting the Phase Ib NMIBC clinical study,
- • Placing the software, firmware and hardware modifications of the TLC-2000 laser system on temporary hold.
Research and development expenses represented 38% of the Company’s operating expenses for the nine-month period ended September 30, 2018 and represent investment into the research and development of the Company’s anti-cancer technology.
The net loss for the nine-month period ended September 30, 2018 was $2,612,168 which included $278,187 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 2017 of $4,893,771, which included $543,891 of net non-cash expenses. The PDT division represented $1,537,218 of this loss (59%) for the nine-month period ended September 30, 2018.
The decrease in net loss is primarily attributed to the following:
1) Decreased investment in research and development in the Phase Ib NMIBC clinical study.
2) Decreased investment in external engineering resources to redesign the software, firmware and hardware of the TLC-2000 therapeutic laser.
3) Decreased sales, marketing and administrative costs.
On May 19, 2018, Theralase’s Medical and Scientific Advisory Board (“MSAB”) was convened to examine the clinical results obtained on the first six patients enrolled and treated in the Phase IB Non-Muscle Invasive Bladder Cancer (“NMIBC”) Clinical Study (“Study”) utilizing TLD-1433-based Photo Dynamic Therapy (“PDT”); specifically evaluating: the primary endpoint of safety and tolerability, the secondary endpoint of pharmacokinetics (movement and exit of drug within tissue) and the exploratory endpoint of efficacy primarily at 90 days and secondarily at 180 days.
The MSAB is comprised of leading experts in bladder cancer and science that have been retained by the Company to provide advice and strategic guidance on the research, development and commercialization of the TLD-1433-based PDT technology in the treatment of patients inflicted with NMIBC.
On May 30, 2018 the Company announced “Theralase Successfully Completes the Phase Ib Non-Muscle Invasive Bladder Cancer Clinical Study.” Theralase’s MSAB concluded that the Phase Ib NMIBC Clinical Study had achieved its objectives.
After reviewing the clinical data presented by Girish Kulkarni, MD, PhD, FRCSC, an Associate Professor at the University of Toronto, Department of Surgery and the Principal Investigator of the Study, the MSAB unanimously recommended the early termination of the Study due to achievement of the primary and secondary endpoints. The MSAB also recommended that the clinical data collected from the first three patients treated at the Maximum Recommended Starting Dose (“MRSD”) (0.35 mg/cm2) and the three patients treated at the Therapeutic Dose (0.70 mg/cm2) were sufficient to support the conclusion that the Study had successfully achieved the Study’s primary and secondary endpoints and had adequately addressed the Study’s scientific, technical and clinical questions, as per the approved Study design and clinical protocol. The MSAB recommendation to the Company was to terminate the Study based on the six patients treated to date and suggested that the Company pursue a pivotal Phase II NMIBC clinical study approval with Health Canada and the FDA with efficacy as the primary endpoint.
On July 16, 2018, the Company announced “Theralase Demonstrates Anti-Cancer Technology Prevents Recurrence of Bladder Cancer at 180 Days Post-Treatment. Patient Five Demonstrates No Clinical Evidence of NMIBC at 180 Day Cystoscopy Analysis”.
On August 13, 2018, the Company announced “Theralase Achieves Exploratory Efficacy Endpoint in Phase Ib Non Muscle Invasive Bladder Cancer Clinical Study for Patients Five and Six. Patient Five and Six Demonstrate No Clinical Evidence of NMIBC at 180 Day Cystoscopy Analysis”. Both patients were treated with the optimized clinical treatment procedure. The treatment was well tolerated by both patients, who demonstrated no tumour recurrence or presence of disease at the 180 day clinical and cystoscopy assessment. The patients have met Study endpoints demonstrating achievement of the primary, secondary and exploratory endpoints at 180 days post treatment and marked a new achievement for the Company.
On September 10, 2018 the Company announced that “Health Canada Approves Commencement of Phase II Clinical Study”. Study II titled, “A Phase II Clinical Study of Intravesical Photo Dynamic Therapy in Patients with BCG-Unresponsive Non-Muscle Invasive Bladder Cancer or Patients Who are Intolerant to BCG Therapy” will utilize the Therapeutic Dose (0.70 mg/cm2) of TLD-1433 and will focus on the treatment of approximately 100 NMIBC patients in approximately 20 clinical sites located in Canada, the US and internationally, with a primary endpoint of efficacy, subject to Health Canada approval of the Study Device and the respective oncology centers Review Ethics Board (“REB”) approval.
On November 8, 2018, the Company announced “Theralase Provides Update on 9 months Post Treatment Cystoscopy Analysis – Patient Five Cancer-Free After Single PDT Treatment.” The treatment was well tolerated by the patient, who demonstrated no tumour recurrence or presence of disease at the 270 day clinical and cystoscopy assessment. The patient has met Study endpoints demonstrating achievement of the primary, secondary and exploratory endpoints at 270 days post treatment and marks a new achievement for the Company.
Oncology sites will be launched in Canada, pending Health Canada Approval (ITA & UHN REB pending), in the US, pending Food and Drug Administration approval, and internationally, pending international regulatory approval.
The primary endpoint of the Study II design will be:
Efficacy – Evaluated by Complete Response (“CR”) in patients with Carcinoma In-Situ (“CIS”) with or without resected papillary disease at 90 days post-treatment with duration of CR evaluated at 360 days post-treatment.
Patient CR is defined as at least one of the following:
1) Negative cystoscopy and negative (including atypical) urine cytology
2) Positive cystoscopy with biopsy-proven benign or low-grade NMIBC
3) Negative cystoscopy with malignant urine cytology, if cancer is found in the upper tract or prostatic urethra and random bladder biopsies are negative
The secondary endpoint of the Study design will be:
Safety – Evaluated by the 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
Proposed Clinical Treatment Plan:
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.
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 Theralase’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 Theralase to: successfully fund and complete a Phase II NMIBC clinical study, successfully fund and complete a Phase Ib GBM clinical study, successfully fund and complete a Phase Ib NSCLC clinical study, secure the requisite regulatory approvals to commence and fund a Phase II NMIBC clinical study, Phase Ib GBM clinical study and/or a Phase Ib NSCLC clinical study and implement its development plans. 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 press 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.
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:
1.866.THE.LASE (843-5273)
416.699.LASE (5273)
info@theralase.com
www.theralase.com