TORONTO, March 26, 2018 (GLOBE NEWSWIRE) -- Profound Medical Corp. (TSX-V: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 (inside-out) and focused (outside-in) ultrasound technology for the incision-free ablation of diseased tissue, today reported financial results for the fourth quarter and full year ended December 31, 2017. 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.
Full Year 2017 Corporate Highlights
- On January 17, 2017, the Company announced the appointment of Dr. Kenneth Galbraith, an accomplished life sciences industry veteran, to its Board of Directors.
- On March 9, 2017, Profound announced that its common shares were eligible for trading on the OTCQX® Best Market under the symbol “PRFMF”.
- On March 20, 2017, Profound announced the first sale of a TULSA-PRO® system in Finland to the Turku University Hospital. The deal was completed in collaboration with Royal Philips ("Philips"), which is working in partnership with Profound to commercialize the TULSA-PRO® system in Europe.
- On March 27, 2017, the Company announced the first TULSA-PRO® patient paid procedure was successfully conducted at the ALTA Klinik in Bielefeld, Germany.
- On April 18, 2017, the Company announced Depository Trust Company, or DTC, eligibility for its common shares listed on the OTCQX®.
- On May 9, 2017, Profound reported its financial results for the first quarter of 2017, in which the Company recorded first-time revenues from the pilot commercial launch of its TULSA-PRO® system in key European and other CE mark jurisdictions.
- On June 30, 2017, Profound announced that it had entered into a definitive agreement to expand the existing collaboration between the two companies and acquire Philips’ Sonalleve® business.
- On July 31, 2017, Profound completed the acquisition of the Sonalleve® business from Philips, establishing Profound as a market leader in MR-Ultrasound ablation therapy.
- On September 20, 2017, Profound completed a bought deal financing pursuant to a short form prospectus, for total gross proceeds of $10 million.
- On November 6, 2017, Profound announced expanded clinical use of TULSA-PRO® beyond the treatment of localized prostate cancer, with Benign Prostatic Hyperplasia, or BPH, treatments utilizing the technology starting to be conducted in Germany.
Year-to-Date 2018 Corporate Highlights
- On January 31, 2018, the Company announced the completion of patient enrollment in the TACT (TULSA-PRO® Ablation Clinical Trail) pivotal study designed to further evaluate the safety and efficacy of TULSA-PRO® to ablate prostate tissue in patients with localized, organ-confined prostate cancer. The primary efficacy endpoint of TACT is the proportion of patients achieving a post-treatment prostate-specific antigen (“PSA”) reduction ≥ 75% of their pre-treatment baseline value. The Company’s pre-established performance goal for the success proportion is 50% of patients. Based on its preliminary analysis, Profound announced that, of the first 63 evaluable patients, the median PSA reduction to-date is 93%, and 92% (58 out of 63) have achieved the PSA reduction success proportion.
- On March 20, 2018, Profound completed a bought deal financing pursuant to a short form prospectus (the “2018 Bought Deal Offering”), for total gross proceeds of $34.5 million.
“2017 was truly a transformative year for Profound,” said Arun Menawat, Profound’s CEO. “With the growing success of the pilot commercial launch of TULSA-PRO® in Europe, combined with the acquisition of Philips’ Sonalleve® business, Profound made the leap from a development-stage medical device company to a platform company focused on growth. Through the last financing, we now also have the financial resources required to continue to further drive clinical adoption of TULSA-PRO® in Europe, advance development of the technology toward successful commercialization in the United States, and execute our commercial plans for the Sonalleve® business.”
Summary Fourth Quarter 2017 Results
For the quarter ended December 31, 2017, the Company recorded revenues of $1,890,482, with $1,738,450 from sale of products and $152,032 from installation and training services. The fourth quarter of 2017 revenues compared to $nil in the fourth quarter of 2016, and reflected a 29% increase sequentially over $1,465,412 recorded in the previous quarter.
The Company recorded a net loss for the three months ended December 31, 2017 of $4,528,993 or $0.06 per common share, compared with a net loss of $4,788,617 or $0.10 per common share, for the fourth quarter of 2016. The decrease in net loss was primarily attributed to a decrease in R&D expenses of $234,482, G&A expenses of $64,566 and an increase in gross profit of $826,532. These were partially offset by an increase in selling and distribution expenses of $626,386 and financing costs of $179,375.
Expenditures for R&D for the three months ended December 31, 2017 were lower by $234,482 compared to the three months ended December 31, 2016. Overall, the decrease in R&D spending was attributed to the advanced stages of development of the Company’s products. Materials and other expenses decreased by $768,937 and $95,304 respectively. These costs were lower compared to the 2016 fourth quarter, due to lower R&D initiatives and the in-house manufacturing of disposables. Partially offsetting this amount was an increase in clinical trial costs and salaries and benefits by $160,789 and $206,899, respectively, resulting from ongoing activities related to clinical sites visits, enrollment initiatives and patient treatment. Amortization of intangible assets increased by $272,133 due to the Sonalleve® transaction, and amortization of the acquired intangible assets.
General and administrative expenses for the fourth quarter of 2017 were lower by $64,566 compared to the three months ended December 31, 2016. Professional and consulting fees increased by $212,627 due to increased legal fees associated with the Sonalleve® patents and the inclusion of the Sonalleve® business operations. These costs were partially offset by a decrease in share-based compensation and salaries and benefits by $151,588 and $149,291, respectively, due to the options granted to executive officers in the fourth quarter of 2016 and separation payments to a former executive officer ending in the prior quarter.
Summary Full Year 2017 Results
For the year ended December 31, 2017, the Company recorded revenues of $4,904,550, with $4,663,986 from the sale of products and $240,564 from installation and training services. The full year 2017 revenues compared to $nil in the twelve months ended December 31, 2016.
The Company recorded a net loss for the year ended December 31, 2017 of $18,822,342, or $0.31 per common share, compared with a net loss of $16,326,769 or $0.39 per common share for the year ended December 31, 2016. For the year ended December 31, 2017, the increase in net loss was primarily attributed to an increase in selling and distribution expenses of $2,643,371, G&A expenses of $1,565,927 and an increase in financing costs of $419,185. These increases were partially offset by a gross profit of $1,872,342.
Expenditures for R&D for the year ended December 31, 2017 were lower by $350,503 compared to the year ended December 31, 2016. Overall, the decrease in R&D spending reflects the advanced stages of development of the Company’s products and the ramp-up of commercial operations. Materials, contractors and other expense were lower by $2,523,608, $136,386 and $204,711, respectively due to lower material costs and R&D initiatives associated with the Company’s TACT Pivotal Clinical Trials. Partially offsetting this amount was an increase in clinical trial costs, salaries and benefits, amortization of intangible assets, consulting fees and travel by $1,311,878, $562,626, $458,980, $80,763 and $66,248, respectively, resulting from ongoing activities related to the initiation of clinical sites visits, enrollment initiatives, patient treatment and workforce costs.
G&A expenses for the year ended December 31, 2017 were higher by $1,565,927 compared to the year ended December 31, 2016. Salaries and benefit expenses increased by $88,190, primarily related to a separation payment to a former executive officer and the addition of key executives. In addition, professional and consulting fees increased by $976,380 due to legal fees associated with the Sonalleve® transaction and the inclusion of Sonalleve® operations. Share based compensation by $289,689 due to new options issued to executive officers and rent increased by $20,364 due to the Company’s relocation to a larger facility in July 2016. Depreciation expense increased by $195,218 primarily due to the new property and equipment for the new facility.
Liquidity and Outstanding Share Capital
As at December 31, 2017, the Company had cash of $11,103,223. Subsequent to year-end, on March 20, 2018, Profound closed the 2018 Bought Deal Offering, yielding gross proceeds to the Company of $34,500,000, before deducting underwriting commissions and estimated offering expenses payable by the Company.
As at March 23, 2018, Profound had an unlimited number of authorized common shares with 107,617,377 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, March 26, 2018, at 4:30 p.m. ET during which time the results will be discussed.
Live Call: 1- 888-407-9210 (Canada and the United States)
1-201-689-8049 (International)
Replay: 1-877-481-4010 (Canada and the United States)
Replay ID: 26865
The call will also be broadcast live and archived on the Company's website at profoundmedical.com under "Investor Presentations" in the Investor Relations section.
About Profound Medical Corp.
The Profound 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 marked 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 FDA for clearance to market TULSA-PRO® in the United States.
Profound 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 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.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange), nor the OTCQX accepts responsibility for the adequacy or accuracy of this release.
For further information, please contact:
Stephen Kilmer
Investor Relations
skilmer@profoundmedical.com
T: 647.872.4849
Or
Matthew Sobczyk
Interim Vice President, Finance
T: 647.476.1350
Profound Medical Corp.
Consolidated Balance Sheets
As at December 31, 2017 and 2016
| 2017 $ | 2016 $ | |||||
| Assets | ||||||
| Current assets | ||||||
| Cash | 11,103,223 | 20,833,061 | ||||
| Trade and other receivables | 4,251,658 | 266,336 | ||||
| Investment tax credits receivable | 240,000 | 264,000 | ||||
| Inventory | 1,431,157 | 416,823 | ||||
| Prepaid expenses and deposits | 576,028 | 696,909 | ||||
| 17,602,066 | 22,477,129 | |||||
| Property and equipment | 1,726,150 | 953,029 | ||||
| Intangible assets | 5,141,998 | 262,685 | ||||
| Goodwill | 3,409,165 | - | ||||
| 27,879,379 | 23,692,843 | |||||
| Liabilities | ||||||
| Current liabilities | ||||||
| Accounts payable and accrued liabilities | 5,081,704 | 1,771,427 | ||||
| Customer deposits | - | 259,293 | ||||
| Deferred revenue | 241,316 | - | ||||
| Long-term debt | 4,701,214 | 2,877,050 | ||||
| Provisions | 93,222 | - | ||||
| Other liabilities | 534,958 | 39,357 | ||||
| Income taxes payable | 72,779 | - | ||||
| 10,725,193 | 4,947,127 | |||||
| Long-term debt | 443,875 | 3,760,826 | ||||
| Provisions | 988,239 | 39,619 | ||||
| Other liabilities | 1,580,933 | 109,044 | ||||
| 13,738,240 | 8,856,616 | |||||
| Shareholders’ Equity | ||||||
| Share capital | 98,365,770 | 83,272,678 | ||||
| Contributed surplus | 6,103,970 | 3,000,563 | ||||
| Accumulated other comprehensive income (loss) | (57,929 | ) | 11,316 | |||
| Deficit | (90,270,672 | ) | (71,448,330 | ) | ||
| 14,141,139 | 14,836,227 | |||||
| 27,879,379 | 23,692,843 | |||||
Profound Medical Corp.
Consolidated Statements of Loss and Comprehensive Loss
For the years ended December 31, 2017 and 2016
| 2017 $ | 2016 $ | |||||
| Revenue | ||||||
| Products | 4,663,986 | - | ||||
| Services | 240,564 | - | ||||
| 4,904,550 | - | |||||
| Cost of sales | 3,032,208 | - | ||||
| Gross profit | 1,872,342 | - | ||||
| Expenses | ||||||
| Research and development | 9,638,190 | 9,988,693 | ||||
| General and administrative | 5,935,215 | 4,369,288 | ||||
| Selling and distribution | 3,925,804 | 1,282,433 | ||||
| 19,499,209 | 15,640,414 | |||||
| Finance costs | 1,249,084 | 829,899 | ||||
| Finance income | (127,732 | ) | (157,598 | ) | ||
| Net finance costs | 1,121,352 | 672,301 | ||||
| Loss before income taxes | 18,748,219 | 16,312,715 | ||||
| Income taxes | 74,123 | 14,054 | ||||
| Net loss for the year | 18,822,342 | 16,326,769 | ||||
| Other comprehensive loss (income) | ||||||
| Item that may be reclassified to profit or loss | ||||||
| Foreign currency translation adjustment | (69,245 | ) | 11,316 | |||
| Comprehensive loss for the year | 18,753,097 | 16,338,085 | ||||
| Basic and diluted weighted average shares outstanding | 61,404,141 | 41,510,145 | ||||
| Basic and diluted loss per common share | 0.31 | 0.39 | ||||
Profound Medical Corp.
Consolidated Cash Flows
For the years ended December 31, 2017 and 2016
| 2017 $ | 2016 $ | |||||
| Cash provided by (used in) | ||||||
| Operating activities | ||||||
| Net loss for the year | (18,822,342 | ) | (16,326,769 | ) | ||
| Depreciation of property and equipment | 371,320 | 167,335 | ||||
| Amortization of intangible assets | 500,518 | 19,673 | ||||
| Loss on disposal of property and equipment | - | 10,248 | ||||
| Share-based compensation | 1,338,330 | 1,001,558 | ||||
| Interest and accretion expense | 1,347,825 | 829,899 | ||||
| Change in fair value of contingent consideration | 82,578 | - | ||||
| Transaction costs related to business acquisition | 716,767 | - | ||||
| Net change in non-cash working capital balances | ||||||
| Investment tax credits receivable | 24,000 | (91,000 | ) | |||
| Trade and other receivables | (3,985,322 | ) | (173,857 | ) | ||
| Prepaid expenses and deposits | 120,881 | (557,604 | ) | |||
| Inventory | (1,014,334 | ) | (416,823 | ) | ||
| Accounts payable and accrued liabilities | 3,368,675 | 775,781 | ||||
| Provisions | 1,041,842 | - | ||||
| Customer deposits | (259,293 | ) | 259,293 | |||
| Deferred revenue | 241,316 | - | ||||
| Income taxes payable | 72,779 | - | ||||
| (14,854,460 | ) | (14,502,266 | ) | |||
| Investing activities | ||||||
| Cash acquired in business acquisition | 183,988 | - | ||||
| Transaction costs related to business acquisition | (716,767 | ) | - | |||
| Sale of short-term investment | - | 10,000,000 | ||||
| Purchase of intangible assets | (34,080 | ) | (223,174 | ) | ||
| Purchase of property and equipment | (430,569 | ) | (863,991 | ) | ||
| (997,428 | ) | 8,912,835 | ||||
| Financing activities | ||||||
| Issuance of common shares | 10,000,000 | 17,402,000 | ||||
| Transaction costs paid | (1,086,132 | ) | (1,219,003 | ) | ||
| Payment of long-term debt and interest | (2,877,050 | ) | (286,700 | ) | ||
| Payment of other liabilities | (15,069 | ) | - | |||
| Proceeds from share options exercised | 100,301 | 3,675 | ||||
| 6,122,050 | 15,899,972 | |||||
| Increase (decrease) in cash during the year | (9,729,838 | ) | 10,310,541 | |||
| Cash - Beginning of year | 20,833,061 | 10,522,520 | ||||
| Cash - End of year | 11,103,223 | 20,833,061 | ||||