TORONTO, ON / ACCESSWIRE / May 29, 2020 / Theralase® Technologies Inc. (“Theralase” or the “Company“) (TSXV:TLT)(OTCQB:TLTFF), a clinical stage pharmaceutical company dedicated to the research and development of light activated PhotoDynamic Compounds (“PDC“) and their associated drug formulations intended to safely and effectively destroy various cancers released its audited annual consolidated 1Q2020 financial statements.
Total revenue for the three-month period ended March 31, 2020, decreased to $111,542 from $121,179 for the same period in 2019, an 8% decrease.
In Canada, revenue remained relatively constant at $70,506 from $70,617 in 2019. In the US, revenue decreased 100% to $Nil from $5,075 and international revenue remained constant at $Nil for 2020 and 2019, during the three-month period ended March 31, 2019. The decrease in total revenue in 2020 is due to the COVID-19 pandemic as most health care practitioners elected to put their practices on quarantine and any purchasing decisions on hold in March 2020.
Cost of sales for the three-month period ended March 31, 2020, was $99,447 (89% of sales) resulting in a gross margin of $12,096 or 11% of revenue, compared to a cost of sales of $84,251 (70% of revenue) in 2019, resulting in a gross margin of $36,928 or 70% 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 gross margin as a percentage of sales decrease, year over year, is attributed to decreased sales and fixed production salaries for the TLC-1000 and TLC-2000 product lines.
For the three-month period ended March 31, 2020, selling expenses decreased to $136,894, from $178,807 in 2019, a 23% 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.
Administrative expenses for the three-month period ended March 31, 2020, increased slightly to $533,329 from $531,557 in 2019, representing a 0.3% increase. The increase in administrative expenses is primarily attributed to increased spending on director and advisory fees (38%) and stock based compensation (331%).
Net research and development expenses for the three-month period ended March 31, 2020, increased to $1,047,282 from $447,751 in 2019, a 134% increase.
Research and development expenses for the three-month period ended March 31, 2020, increased primarily due to increased expenses for commencing the Phase II NMIBC Clinical Study (“Study II“). Research and development expenses represented 63% of the Company’s operating expenses for the three-month period ended March 31, 2020, and represent an investment into the research and development of the Company’s PDT technology.
The net loss for the three-month period ended March 31, 2020, was $1,643,856 which included $327,921 of net non-cash expenses (i.e.: amortization, stock-based compensation expense and foreign exchange gain/loss). This compared to a net loss for the same period in 2019 of $1,125,471, which included $327,921 of net non-cash expenses.
The PDT division represented $1,099,045 of this loss (67%) for the three-month period ended March 31, 2020.
The increase in net loss is primarily attributed to the following:
- Increased investment in research, development and clinical expense of Study II.
- Decreased sales of TLC-1000 and TLC-2000 due to market uncertainty directly attributable to the COVID-19 pandemic.
- FDA IND Authorization. On May 19, 2020, the Company received FDA Investigational New Drug (“IND“) authorization to commence enrolling and treating patients in Study II in the United States, a key milestone and achievement for the Company.
- FDA Fast Track. In June 2019, a conference call between the FDA and the Company, that Theralase would potentially be eligible for Fast Track Approval (“FTA“) post receipt of the FDA IND authorization, based on the clinical study data collected to date. As stated by the FDA, fast track is a process designed to facilitate the development, and expedite the review of drugs to treat serious conditions and fill an unmet medical need.
- Breakthrough Therapy Designation. Continuing the FDA conference call, it was further discussed and agreed that Theralase would potentially be eligible for Breakthrough Therapy Designation (“BTD“) and / or Accelerated Approval (“AA“), if Theralase can demonstrate clinically significant results (high safety profile and high efficacy response), similar to the safety and efficacy results observed in the Phase Ib NMIBC clinical study (high safety profile and 67% CR) at an interim analysis of approximately 20 to 25 patients enrolled and successfully treated. To date, 12 patients have been enrolled and treated in Study II, representing approximately 50% of the interim milestone to submit an analysis to the FDA in support of a BTD.
- Covid-19 Update. Due to the current COVID-19 pandemic, the Canadian clinical study sites are currently on clinical hold for patient enrolment and treatment until the federal government, respective provincial governments and executive committees of the respective hospitals deem the clinical study sites able to re-commence Study II. Theralase is in constant communication with all clinical sites for any update on re-starting the enrollment and treatment activities of Study II.
- Clinical study site status. Theralase has successfully launched 4 Canadian study sites (with 1 additional clinical study site in advanced negotiation) and with FDA IND approval, the Company can now move forward with onboarding 15 clinical study sites in the US. In 2019, Theralase signed an agreement with a Trial Management Organization (“TMO“) to provide 4 to 6 US based urology study sites for Study II which will considerably advance the US onboarding process.
Theralase has successfully treated a total of 12 patients (8 patients at University Health Network (“UHN“), Toronto, Canada and 4 patients at McGill University Health Centre (“MUHC“) in Montreal, Canada).
All Canadian study sites are currently on hold however, UHN is slowly transitioning to patient treatment and follow-up and will proceed with second treatment of one patient on May 29, 2020.
- Additional cancer indications. Extensive preclinical research has been conducted with Rutherrin®, a patented formulation of the Company’s lead PDC (TLD-1433) combined with transferrin. The Company has demonstrated significant anti-cancer efficacy of Rutherrin®, across numerous preclinical models; including: GlioBlastoma Multiforme (“GBM“) and Non-Small Cell Lung Cancer (“NSCLC“). When Study II is well underway with the majority of the approximately 20 study sites open and recruiting patients, the Company expects to expand the breadth of oncological indications as Theralase has now developed significant expertise and intellectual property of its patented PDCs, in the area of photopharmacology and anti-cancer therapy, with data acquired from preclinical models of human disease.
About Phase II Study
Study II will utilize the Therapeutic Dose (0.70 mg/cm2) of TLD-1433 and will focus on the treatment of approximately 100 to 125 BCG-Unresponsive NMIBC patients presenting with Carcinoma In-Situ (“CIS“) in approximately 20 clinical study sites located in Canada and the US, with a primary endpoint of efficacy (measured by Complete Response (“CR“)) and a secondary endpoint of duration of CR at approximately 360 days post-initial CR and a tertiary endpoint of safety measured by incidence and severity of adverse events.
The primary and secondary endpoints will be evaluated by:
CR in patients with CIS with or without resected papillary disease at 90 days post-treatment with a 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 tertiary endpoint will be evaluated by:
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
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.
This news release contains “forward-looking statements” which reflect the current expectations of management of the Company’s future growth, results of operations, performance and business prospects and opportunities. Such statements include, but are not limited to, statements regarding the Company’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 the Company to: adequately fund, secure the requisite regulatory approvals to commence and successfully complete a Phase II NMIBC clinical study in a timely fashion and implement its development plans. Many factors could cause the Company’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 Company 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 Company cannot assure prospective investors that actual results, performance or achievements will be consistent with these forward-looking statements. The Company 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.
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SOURCE: Theralase® Technologies Inc.
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