Full Press Release Details
TORONTO, Aug. 14, 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 six months ended June 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 April 23, 2018, Profound announced the appointment of Ian Heynen as Senior Vice-President of Sales and Marketing.
On May 1, 2018, the Company announced the appointment of Aaron Davidson as Chief Financial Officer and Senior Vice-President of Corporate Development.
On May 9, 2018, Profound announced that the Chinese Food and Drug Administration (“CFDA”) approved Sonalleve® for the non-invasive treatment of uterine fibroids.
On May 21, 2018, Profound announced that initial data from the TACT (TULSA-PRO® Ablation Clinical Trial) 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, was presented by Laurence Klotz, M.D. during a plenary session at the American Urological Association Annual Meeting in San Francisco, CA. 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. Dr. Klotz reported that the median PSA reduction to-date was 95% (nadir 0.36 ng/ml), and 95% (109 out of 115) patients have met the PSA endpoint.
On June 14, 2018, the Company announced that all eight nominees for its board of directors were elected at its Annual Meeting of Shareholders, including two new independent directors – Dr. Aruthur Rosenthal and Mr. Brian Ellacott.
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.
“While we continue to advance the development of TULSA-PRO® toward successful commercialization in the United States, we are also making progress towards building a recurring revenue based business model for the technology in Europe,” said Arun Menawat, Profound’s CEO. “Although it takes longer to grow revenue using this model, we remain confident as the pipeline of hospitals and urology clinics that have expressed interest in TULSA-PRO® continues to increase. Similarly, since receiving the CFDA approval of Sonalleve® in May, the pipeline for capital sales in China is also increasing. Accordingly, we continue to expect that the second half of this year will be better than the first in terms of overall revenue.”
Summary Second Quarter 2018 Results
For the quarter ended June 30, 2018, the Company recorded revenue of $213,343, with $170,931 from the sale of products and $42,412 from installation and training services. The second quarter 2018 revenue compared to $957,139 in the same three month period a year ago.
The Company recorded a net loss for the three months ended June 30, 2018 of $5,831,028 or $0.05 per common share, as compared to a net loss of $4,658,493, or $0.08 per common share, for the three months ended June 30, 2017. The increase in net loss was primarily attributed to an increase in G&A expenses of $507,944, an increase in selling and distribution expenses of $216,072, an increase in net finance costs of $98,042 and a decrease in gross profit of $398,696. These were partially offset by a decrease in R&D expenses of $70,063.
Expenditures for R&D for the three months ended June 30, 2018 were lower by $70,063 compared to the three months ended June 30, 2017. Overall, the decrease in R&D spending was attributed to improved product quality and functionality. Clinical trial costs, materials and consulting fees decreased by $553,162, $59,138 and $169,755, respectively. These costs were lower as a result of the completion of the TACT Pivotal Clinical Trial enrollment initiatives and the insourcing manufacturing project. Offsetting these amounts was an increase in salaries and benefits and rent by $356,605 and $80,230, respectively, due to a higher number of R&D personnel and new facilities in Finland. Amortization of intangible assets increased by $272,635 due to the Sonalleve® transaction and amortization of the acquired intangible assets.
General and administrative expenses for the second quarter of 2018 were higher by $507,944 compared to the three months ended June 30, 2017. Consulting fees and share based compensation decreased by $103,403 and $205,138, respectively, due to decreased legal fees in the three months ended June 30, 2018 compared to the prior year and a decrease in share based compensation expense in the 2018 second quarter due to a one time award to Company executives in 2017. These costs were offset by an increase in salaries and benefits and travel by $673,481 and $61,254, respectively, due to increased G&A personnel, bonus payments and salary increases. Depreciation expense increased by $78,777 primarily due to leasehold improvements for the new facility that were constructed in the later part of 2017.
Liquidity and Outstanding Share Capital
As at June 30, 2018, the Company had cash of $31,995,919.
As at August 14, 2018, Profound had an unlimited number of authorized common shares with 108,043,939 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, August 14, 2018, at 4:30 p.m. ET during which time the results will be discussed.
| Live Call: | 1-877-407-8031 (Canada and the United States) |
| 1-201-689-8031 (International) | |
| Replay: | 1-877-481-4010 (Canada and the United States) |
| Replay ID: | 36198 |
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:
Chief Financial Officer and Senior Vice-President of Corporate Development
Profound Medical Corp.
Interim Condensed Consolidated Balance Sheets
| June 30, 2018 $ | December 31, 2017 $ | |||||
| Assets | ||||||
| Current assets | ||||||
| Cash | 31,995,919 | 11,103,223 | ||||
| Trade and other receivables | 1,024,569 | 4,251,658 | ||||
| Investment tax credits receivable | 360,000 | 240,000 | ||||
| Inventory | 2,575,878 | 1,431,157 | ||||
| Prepaid expenses and deposits | 669,688 | 576,028 | ||||
| 36,626,054 | 17,602,066 | |||||
| Property and equipment | 1,456,921 | 1,726,150 | ||||
| Intangible assets | 4,577,779 | 5,141,998 | ||||
| Goodwill | 3,409,165 | 3,409,165 | ||||
| 46,069,919 | 27,879,379 | |||||
| Liabilities | ||||||
| Current liabilities | ||||||
| Accounts payable and accrued liabilities | 2,761,152 | 5,081,704 | ||||
| Deferred revenue | 269,836 | 241,316 | ||||
| Long-term debt | 3,716,865 | 4,701,214 | ||||
| Provisions | 1,163,903 | 93,222 | ||||
| Other liabilities | 614,566 | 534,958 | ||||
| Income taxes payable | 134,868 | 72,779 | ||||
| 8,661,190 | 10,725,193 | |||||
| Long-term debt | - | 443,875 | ||||
| Provisions | 68,821 | 988,239 | ||||
| Other liabilities | 1,329,677 | 1,580,933 | ||||
| 10,059,688 | 13,738,240 | |||||
| Shareholders’ Equity | ||||||
| Share capital | 120,938,106 | 98,365,770 | ||||
| Contributed surplus | 16,155,245 | 6,103,970 | ||||
| Accumulated other comprehensive loss | (43,234 | ) | (57,929 | ) | ||
| Deficit | (101,039,886 | ) | (90,270,672 | ) | ||
| 36,010,231 | 14,141,139 | |||||
| 46,069,919 | 27,879,379 |
Profound Medical Corp.
Interim Condensed Consolidated Statements of Loss and Comprehensive Loss
| Three months ended June 30, 2018 $ | Three months ended June 30, 2017 $ | Six months ended June 30, 2018 $ | Six months ended June 30, 2017 $ | |||||||||
| Revenue | ||||||||||||
| Products | 170,931 | 919,845 | 543,425 | 1,472,763 | ||||||||
| Services | 42,412 | 37,294 | 46,253 | 75,893 | ||||||||
| 213,343 | 957,139 | 589,678 | 1,548,656 | |||||||||
| Cost of sales | 126,259 | 471,359 | 357,334 | 782,584 | ||||||||
| Gross profit | 87,084 | 485,780 | 232,344 | 766,072 | ||||||||
| Expenses | ||||||||||||
| Research and development | 2,347,909 | 2,417,972 | 4,864,690 | 4,301,101 | ||||||||
| General and administrative | 2,236,529 | 1,728,585 | 3,539,733 | 2,846,599 | ||||||||
| Selling and distribution | 1,113,225 | 897,153 | 2,060,127 | 2,047,652 | ||||||||
| Total operating expenses | 5,697,663 | 5,043,710 | 10,464,550 | 9,195,352 | ||||||||
| Finance costs | 313,606 | 130,436 | 633,569 | 420,136 | ||||||||
| Finance income | (117,357 | ) | (32,229 | ) | (157,161 | ) | (80,794 | ) | ||||
| Net finance costs | 196,249 | 98,207 | 476,408 | 339,342 | ||||||||
| Loss before income taxes | 5,806,828 | 4,656,137 | 10,708,614 | 8,768,622 | ||||||||
| Income tax expense | 24,200 | 2,356 | 60,600 | 4,653 | ||||||||
| Net loss attributable to shareholders for the period | 5,831,028 | 4,658,493 | 10,769,214 | 8,773,275 | ||||||||
| Other comprehensive loss | ||||||||||||
| Item that may be reclassified to profit or loss | ||||||||||||
| Foreign currency translation adjustment - net of tax | 57,943 | 15,556 | 14,695 | 18,196 | ||||||||
| Net loss and comprehensive loss for the period | 5,888,971 | 4,674,049 | 10,783,909 | 8,791,471 | ||||||||
| Basic and diluted weighted average shares outstanding | 107,727,319 | 55,372,307 | 92,614,640 | 55,329,563 | ||||||||
| Basic and diluted net loss per common share | 0.05 | 0.08 | 0.12 | 0.16 |
Profound Medical Corp.
Interim Condensed Consolidated Statements of Cash Flows
| Six months ended June 30, 2018 $ | Six months ended June 30, 2017 $ | |||||
| Cash provided by (used in) | ||||||
| Operating activities | ||||||
| Net loss for the period | (10,769,214 | ) | (8,773,275 | ) | ||
| Depreciation of property and equipment | 284,167 | 117,790 | ||||
| Amortization of intangible assets | 564,219 | 25,839 | ||||
| Share-based compensation | 476,931 | 551,025 | ||||
| Interest and accretion expense | 522,215 | 525,412 | ||||
| Change in deferred rent | 20,670 | - | ||||
| Change in fair value of contingent consideration | (24,546 | ) | - | |||
| Net change in non-cash working capital balances | ||||||
| Prepaid expenses and deposits | (93,660 | ) | (47,217 | ) | ||
| Accounts payable and accrued liabilities | (2,320,795 | ) | 1,454,745 | |||
| Provisions | 151,263 | 657,767 | ||||
| Inventory | (1,144,721 | ) | (514,063 | ) | ||
| Investment tax credits receivable | (120,000 | ) | (133,000 | ) | ||
| Trade and other receivables | 3,227,089 | (1,581,058 | ) | |||
| Deferred revenue | 28,520 | 67,789 | ||||
| Customer deposits | - | (259,293 | ) | |||
| Income taxes payable | 62,089 | - | ||||
| (9,135,773 | ) | (7,907,539 | ) | |||
| Investing activities | ||||||
| Purchase of intangible assets | - | (34,079 | ) | |||
| Purchase of property and equipment | - | (279,713 | ) | |||
| - | (313,792 | ) | ||||
| Financing activities | ||||||
| Issuance of common shares | 34,500,000 | - | ||||
| Transaction costs paid | (2,455,695 | ) | - | |||
| Payment of long-term debt and interest | (1,953,822 | ) | (1,970,608 | ) | ||
| Payment of other liabilities | (164,389 | ) | (2,956 | ) | ||
| Proceeds from share options exercised | 102,375 | 28,301 | ||||
| 30,028,469 | (1,945,263 | ) | ||||
| Increase (decrease) in cash during the period | 20,892,696 | (10,166,594 | ) | |||
| Cash - Beginning of period | 11,103,223 | 20,833,061 | ||||
| Cash - End of period | 31,995,919 | 10,666,467 |