Prepares for First Sonalleve® Shipment to China
TORONTO, Nov. 08, 2018 (GLOBE NEWSWIRE) -- Profound Medical Corp. (TSX:PRN; OTCQX:PRFMF) (“Profound” or the “Company”), the only company to provide a therapeutics platform that provides the precision of real-time Magnetic Resonance (“MR”) imaging combined with the safety and ablation power of directional and focused ultrasound technology for the incision-free ablation of diseased tissue, today reported financial results for the three and nine months ended September 30, 2018. All amounts, unless specified otherwise, are expressed in Canadian dollars and are presented in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting.
Recent Corporate Highlights
- On July 13, 2018, Profound graduated to the Toronto Stock Exchange.
- On July 31, 2018, the Company announced that it had entered into a term loan agreement with CIBC.
- On September 27, 2018, Dr. Jurgen Futterer presented three-year clinical outcomes and a subgroup analysis of Benign Prostatic Hyperplasia (“BPH”) patients enrolled in the previously-reported prospective Phase I Safety & Feasibility Study of TULSA-PRO® (Chin et al, Eur Urol 2016) at the German Society For Urology 70th Annual Congress 2018. The analysis examined lower urinary tract symptoms in a subgroup of nine of the Phase I study patients who had at least moderately symptomatic BPH, based on International Prostate Symptoms Score (“IPSS”) of ≥ 12, in addition to their cancer at baseline. At 12 months after TULSA, IPSS improved by 9.8 ± 7.1 (58 ± 34%) from 16.1 ± 3.8 to 6.3 ± 5.0 (paired t-test p=0.0033), similar to levels reached with modern surgical therapies, and with at least a moderate (> 5 point) reduction experienced by 8/9 patients (89%).
“We are pleased to report that, following the first sale of a Sonalleve® system in China after receiving CFDA approval for the non-invasive treatment of uterine fibroids, we are now preparing to ship the system in the current quarter,” said Arun Menawat, Profound’s CEO. “We expect that the initial commercial launch of Sonalleve® in China, combined with growing interest from European doctors, clinics and patients in TULSA-PRO®, will increase our sales momentum during the remainder of 2018 and into 2019.”
Summary Third Quarter 2018 Results
For the quarter ended September 30, 2018, the Company recorded revenue of $303,664, with $249,548 from the sale of products and $54,116 from installation and training services. The third quarter 2018 revenue compared to $1,452,773 in the same three-month period a year ago. The decrease was due to a lack of new system sales in the third quarter of 2018.
The Company recorded a net loss for the three months ended September 30, 2018 of $5,134,966, or $0.05 per common share, compared to a net loss of $5,520,074, or $0.09 per common share, for the three months ended September 30, 2017. The decrease in net loss was primarily attributed to a $235,299 decrease in R&D expenses and a $725,111 decrease in net finance costs. These were partially offset by a $133,573 increase in G&A expenses, a $192,269 increase in selling and distribution expenses and a $216,760 decrease in gross profit.
Expenditures for R&D for the three months ended September 30, 2018 deceased $235,299 compared to the three months ended September 30, 2017. Overall, the decrease in R&D spending was attributed to improved product quality and completion of clinical trial enrolment. Clinical trial costs, travel and rent decreased by $378,482, $39,433 and $45,612, due to the completion of the TACT pivotal clinical trial enrolment initiatives, less travel incurred for said clinical trials. These costs were offset by an increase in material costs of $127,334. Amortization of intangible assets increased by $84,048 due to the Sonalleve® transaction and amortization of the acquired intangible assets.
General and administrative expenses for the third quarter of 2018 were higher by $133,573 compared to the three months ended September 30, 2017. Share-based compensation expense and rent decreased by $186,580 and $48,314, due to issuance of stock options to Company executives and employees in 2017. These costs were offset by an increase in salaries and benefits, and in consulting fees by $202,500 and $190,109, respectively, associated with the addition of G&A personnel and board members, salary increases and TSX graduation fees. Depreciation expense decreased by $24,155, primarily due to property and equipment being fully depreciated.
Liquidity and Outstanding Share Capital
As at September 30, 2018, the Company had cash of $35,212,269.
As at November 8, 2018, Profound had an unlimited number of authorized common shares with 108,054,939 common shares issued and outstanding.
For complete financial results, please see our filings at www.sedar.com and our website at www.profoundmedical.com.
Conference Call Details
Profound Medical is pleased to invite all interested parties to participate in a conference call today, November 8, 2018, at 4:30 pm.ET during which time the results will be discussed.
| Live Call: | 1-877-407-9210 (Canada and the United States) |
| 1-201-689-8049 (International) | |
| Replay: | 1-877-481-4010 (Canada and the United States) |
| Replay ID: | 40417 |
The call will also be broadcast live and archived on the Company's website at www.profoundmedical.com under "Webcasts" in the Investor Relations section.
About Profound Medical Corp.
The Profound Medical Corp. team is committed to creating the powerful combination of real-time MR-guidance as the imaging platform and ultrasound as the energy source for delivering non-invasive ablative tools to clinicians. These key technology pillars, linked with intelligent software and robotics, have the potential to fulfill unmet needs of patients and clinicians in many anatomies and disease states, including prostate cancer, uterine fibroids, and bone metastases. Our mission is to “profoundly” change the standard of care by creating a tomorrow where clinicians can confidently ablate tissue with precision; a tomorrow where patients have access to safe and effective treatment options, so they can quickly return to their daily lives.
Profound is commercializing a novel technology, TULSA-PRO®, which combines real-time Magnetic Resonance Imaging with transurethral, robotically-driven therapeutic ultrasound and closed-loop thermal feedback control that is designed to provide precise ablation of the prostate while simultaneously protecting critical surrounding anatomy from potential side effects. TULSA-PRO® is CE marked and Profound is currently conducting a pilot commercial launch of the technology in key European and other CE mark jurisdictions. The Company is also sponsoring a multicenter, prospective FDA-registered clinical trial, TACT, which, if successful, is expected to support its application to the U.S. Food and Drug Administration for clearance to market TULSA-PRO® in the United States.
Profound Medical is also commercializing Sonalleve®, an innovative therapeutic platform that combines real-time MR imaging and thermometry with thermal ultrasound to enable precise and incision-free ablation of diseased tissue. Sonalleve® is CE marked for the treatment of uterine fibroids and palliative pain treatment of bone metastases. The technology was also recently approved by the Chinese Food and Drug Administration for the non-invasive treatment of uterine fibroids. The Company is also in the early stages of exploring additional potential treatment markets for Sonalleve®, such as non-invasive ablation of abdominal cancers and hyperthermia for cancer therapy, where the technology has been shown to have clinical application.
Forward-Looking Statements
This release includes forward-looking statements regarding Profound and its business which may include, but is not limited to, the expectations regarding the efficacy of Profound’s technology in the treatment of prostate cancer, uterine fibroids and palliative pain treatment. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "is expected", "expects", "scheduled", "intends", "contemplates", "anticipates", "believes", "proposes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Such statements are based on the current expectations of the management of Profound. The forward-looking events and circumstances discussed in this release, may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the company, including risks regarding the pharmaceutical industry, economic factors, the equity markets generally and risks associated with growth and competition. Although Profound has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Profound undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, other than as required by law.
For further information, please contact:
Stephen Kilmer
Investor Relations
skilmer@profoundmedical.com
T: 647.872.4849
Profound Medical Corp.
Interim Condensed Consolidated Balance Sheets
(Unaudited)
| September 30, 2018 $ | December 31, 2017 $ | |||||
| Assets | ||||||
| Current assets | ||||||
| Cash | 35,212,269 | 11,103,223 | ||||
| Trade and other receivables | 1,141,775 | 4,251,658 | ||||
| Investment tax credits receivable | 420,000 | 240,000 | ||||
| Inventory | 3,281,895 | 1,431,157 | ||||
| Prepaid expenses and deposits | 530,977 | 576,028 | ||||
| 40,586,916 | 17,602,066 | |||||
| Property and equipment | 1,308,527 | 1,726,150 | ||||
| Intangible assets | 4,295,670 | 5,141,998 | ||||
| Goodwill | 3,409,165 | 3,409,165 | ||||
| 49,600,278 | 27,879,379 | |||||
| Liabilities | ||||||
| Current liabilities | ||||||
| Accounts payable and accrued liabilities | 2,764,887 | 5,081,704 | ||||
| Deferred revenue | 524,815 | 241,316 | ||||
| Long-term debt | 129,521 | 4,701,214 | ||||
| Provisions | 1,171,977 | 93,222 | ||||
| Other liabilities | 690,709 | 534,958 | ||||
| Derivative financial instrument | 123,552 | - | ||||
| Income taxes payable | 165,924 | 72,779 | ||||
| 5,571,385 | 10,725,193 | |||||
| Long-term debt | 11,663,354 | 443,875 | ||||
| Provisions | 82,159 | 988,239 | ||||
| Other liabilities | 1,173,595 | 1,580,933 | ||||
| 18,490,493 | 13,738,240 | |||||
| Shareholders’ Equity | ||||||
| Share capital | 120,932,404 | 98,365,770 | ||||
| Contributed surplus | 16,423,643 | 6,103,970 | ||||
| Accumulated other comprehensive loss | (71,410 | ) | (57,929 | ) | ||
| Deficit | (106,174,852 | ) | (90,270,672 | ) | ||
| (31,109,785 | ) | 14,141,139 | ||||
| (49,600,278 | ) | 27,879,379 | ||||
Profound Medical Corp.
Interim Condensed Consolidated Statements of Loss and Comprehensive Loss
(Unaudited)
| Three months ended September 30, 2018 $ | Three months ended September 30, 2017 $ | Nine months ended September 30, 2018 $ | Nine months ended September 30, 2017 $ | |||||||||
| Revenue | ||||||||||||
| Products | 249,548 | 1,452,773 | 792,973 | 2,925,536 | ||||||||
| Services | 54,116 | 12,639 | 100,369 | 88,532 | ||||||||
| 303,664 | 1,465,412 | 893,342 | 3,014,068 | |||||||||
| Cost of sales | 240,686 | 1,185,674 | 598,020 | 1,968,258 | ||||||||
| Gross profit | 62,978 | 279,738 | 295,322 | 1,045,810 | ||||||||
| Expenses | ||||||||||||
| Research and development – net of investment tax credits | 2,577,385 | 2,812,684 | 7,442,075 | 7,113,785 | ||||||||
| General and administrative | 1,765,540 | 1,631,967 | 5,305,273 | 4,478,566 | ||||||||
| Selling and distribution | 896,052 | 703,783 | 2,956,179 | 2,751,435 | ||||||||
| 5,238,977 | 5,148,434 | 15,703,527 | 14,343,786 | |||||||||
| Finance costs | 81,468 | 659,902 | 715,037 | 1,080,038 | ||||||||
| Finance income | (155,201 | ) | (8,524 | ) | (312,362 | ) | (89,318 | ) | ||||
| Net finance (income) costs | (73,733 | ) | 651,378 | 402,675 | 990,720 | |||||||
| Loss before income taxes | 5,102,266 | 5,520,074 | 15,810,880 | 14,288,696 | ||||||||
| Income tax expense | 32,700 | - | 93,300 | 4,653 | ||||||||
| Net loss attributable to shareholders for the period | 5,134,966 | 5,520,074 | 15,904,180 | 14,293,349 | ||||||||
| Other comprehensive loss (income) | ||||||||||||
| Item that may be classified to profit or loss | ||||||||||||
| Foreign currency translation adjustment - net of tax | 28,176 | (3,674 | ) | 13,481 | 14,522 | |||||||
| Net loss and comprehensive loss for the period | 5,163,142 | 5,516,400 | 15,917,661 | 14,307,871 | ||||||||
| Basic and diluted weighted average shares outstanding | 108,044,656 | 61,614,117 | 97,814,500 | 57,456,823 | ||||||||
| Basic and diluted net loss per common share | 0.05 | 0.09 | 0.16 | 0.25 | ||||||||
Profound Medical Corp.
Interim Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Nine months ended September 30, 2018 $ | Nine months ended September 30, 2017 $ | |||||
| Cash provided by (used in) | ||||||
| Operating activities | ||||||
| Net loss for the period | (15,904,180 | ) | (14,293,349 | ) | ||
| Depreciation of property and equipment | 416,071 | 271,225 | ||||
| Amortization of intangible assets | 846,328 | 218,408 | ||||
| Share-based compensation | 753,549 | 973,336 | ||||
| Interest and accretion expense | 770,714 | 1,135,008 | ||||
| Change in deferred rent | 26,718 | 96,026 | ||||
| Change in fair value of derivative financial instrument | (71,270 | ) | - | |||
| Change in fair value of contingent consideration | (106,977 | ) | 52,342 | |||
| Transaction costs related to business acquisition | - | 716,767 | ||||
| Net change in non-cash working capital balances | ||||||
| Prepaid expenses and deposits | 45,051 | 55,082 | ||||
| Accounts payable and accrued liabilities | (2,328,746 | ) | 2,892,346 | |||
| Provisions | 172,675 | 685,317 | ||||
| Inventory | (1,850,738 | ) | (645,623 | ) | ||
| Investment tax credits receivable | (180,000 | ) | 84,000 | |||
| Trade and other receivables | 3,109,883 | (2,309,834 | ) | |||
| Deferred revenue | 283,499 | 149,298 | ||||
| Customer deposits | - | (259,293 | ) | |||
| Income taxes payable | 93,145 | - | ||||
| (13,924,277 | ) | (10,274,970 | ) | |||
| Investing activities | ||||||
| Transaction costs related to business acquisition | - | (716,767 | ) | |||
| Purchase of intangible assets | - | (34,080 | ) | |||
| Purchase of property and equipment | - | (414,949 | ) | |||
| - | (1,165,796 | ) | ||||
| Financing activities | ||||||
| Issuance of common shares | 34,500,000 | 10,000,000 | ||||
| Transaction costs paid | (2,472,498 | ) | (748,196 | ) | ||
| Proceeds from bank loan | 12,500,000 | - | ||||
| Bank loan costs paid | (714,134 | ) | - | |||
| Payment of long-term debt and interest | (5,719,845 | ) | (2,429,230 | ) | ||
| Payment of other liabilities | (165,456 | ) | (7,742 | ) | ||
| Proceeds from share options exercised | 105,256 | 100,301 | ||||
| 38,033,323 | 6,915,133 | |||||
| Increase (decrease) in cash during the period | 24,109,046 | (4,525,633 | ) | |||
| Cash - Beginning of period | 11,103,223 | 20,833,061 | ||||
| Cash - End of period | 35,212,269 | 16,307,428 | ||||