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 unaudited Q12021 condensed
interim consolidated financial statements.
Financial Highlights:
For the three-month periods ended March
31st:
Audited Consolidated Statements of Operations In
Canadian Dollars |
2021$ |
2020$ |
% Change |
Revenue |
|
|
|
Canada |
104,406 |
|
111,543 |
|
6% |
United States |
20,377 |
|
- |
|
|
Total Revenue |
124,783 |
|
111,543 |
|
12% |
|
|
|
|
Cost of Sales |
74,463 |
|
99,447 |
|
-25% |
Gross Margin |
50,320 |
|
12,096 |
|
316% |
Gross Margin as a percentage of sales |
60 |
% |
89 |
% |
|
|
|
|
|
Operating Expenses |
|
|
|
Selling Expenses |
95,780 |
|
136,894 |
|
-30% |
Administrative Expenses |
418,454 |
|
533,329 |
|
-22% |
Research and Development Expenses – CLT Division |
54,616 |
|
138,141 |
|
-60% |
Research and Development Expenses – ACT Division |
534,951 |
|
909,141 |
|
-41% |
Other(1) |
-134,388 |
|
-61,533 |
|
118% |
Total Operating Expenses |
969,413 |
|
1,655,952 |
|
-41% |
|
|
|
|
Net Loss |
-919,093 |
|
-1,643,856 |
|
-44% |
(1) Other represents (Gain) from legal
settlement, (Gain) Loss on foreign exchange, interest accretion on
lease liabilities and interest incomeTotal revenue remained
predominantly flat, year over year, and is primarily attributed to
the COVID-19 pandemic as most health care practitioners elected to
temporarily close their practices and place any purchasing
decisions on temporary or permanent hold.
Cost of sales for the three-month period ended
March 31, 2021 was $74,463 or 60% of revenue resulting in a gross
margin of $50,320 or 40% of revenue. In comparison cost of sales
for the same period in 2020 was $99,447 or 60% of revenue resulting
in a gross margin of $12,096 or 11% 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 increase, as a percentage
of sales, year over year, is attributed to a decrease in labour and
material costs.
The decrease in selling expenses is primarily
due to the restructuring of the Canadian and US sales and marketing
departments, as a result of the COVID-19 pandemic, resulting in the
resignation or termination of certain non-essential sales and
marketing personnel and reduced advertising and travel
expenditures.
The decrease in administrative expenses is
primarily attributed to decreased spending on director and advisory
fees (50%) and administrative salaries (35%) due to the COVID-19
pandemic, resulting in the termination of certain non-essential
administrative personnel. Stock based compensation expense
decreased 54% in the three-month period ended March 31, 2021 due to
a reduction in stock options granted.
The decrease in research and development
expenses for the three-month period ended March 31, 2021 is
attributed primarily to the delay in patient enrollment and
treatment in Phase II NMIBC clinical study (“Study
II”) due to the COVID-19 pandemic. Research and
development expenses represented 61% of the Company’s operating
expenses and represents investment into the research and
development of the Company’s ACT technology.
The net loss for the three-month period ended
March 31, 2021 was $919,093 which included $179,926 of net non-cash
expenses (i.e.: amortization, stock-based compensation expense and
foreign exchange gain/loss). This compared to a net loss in 2020 of
$1,643,856 which included $327,921 of net non-cash expenses. The
ACT division represented $706,435 of this loss (77%) for the
three-month period ended March 31, 2021.
The decrease in net loss is primarily attributed
to the following:
- Delay in patient enrollment and treatment due to the COVID-19
pandemic, resulting in decreased research and development expenses
in Study II.
- Decreased salaries due to the COVID-19 pandemic, resulting in
the resignation or termination of certain non-essential
administrative, research and production personnel.
Operational Highlights:
- Clinical study site
status. Patient enrollment and treatment rates have been
delayed due to the COVID-19 pandemic restrictions in place at
various CSSs; however, they are expected to improve once Canada and
the US recover from the COVID-19 pandemic. Canadian CSSs placed
themselves on temporary hold commencing March 20, 2020 and resumed
normal operations between August 12, 2020 and September 24, 2020.
Although Canadian CSSs recruiting activities were re-commenced in
4Q2020; patient recruitment and treatment activities have been
limited due to the second and third wave of COVID-19. With the
addition of 6 additional US-based CSSs in 1Q2021, Theralase® is
hopeful that patient recruitment and treatment activities will
increase throughout 2021 to help achieve the Company’s strategic
objectives.
- Patient enrollment
status. To date, Study II has enrolled and provided the
primary study treatment for 19 patients (including three patients
from Phase Ib study treated at the Therapeutic Dose) for a total of
22 patients.
- FDA Fast Track
status. Theralase® is currently focused on working with
its Canadian and US-based CSSs to enroll and provide the primary
Study Treatment for up to 6 additional patients in 2Q2021 for a
total of 20 to 25 patients enrolled and treated in Study II.
Theralase® plans to compile progressively the 90, 180, 270, 360 and
450 day assessment data (urine cytology and cystoscopy) for these
patients with the intent of submitting this interim data to the FDA
for consideration of Breakthrough Designation
(“BTD”) approval.
- Additional cancer
indications. The Company has demonstrated significant
anti-cancer efficacy of Rutherrin®, when activated by laser light
or radiation treatment across numerous preclinical models;
including: Glio Blastoma Multiforme (“GBM”) and
Non-Small Cell Lung Cancer (“NSCLC”). The Company
has commenced Non - Good Laboratory Practices
(“GLP”) toxicology studies with Rutherrin® in
animals to help determine the maximum recommended human dose of the
drug, when administered systemically into the human body, via
intravenous injections. Theralase plans to commence GLP toxicology
studies in animals in 2021.
- COVID-19 Research
Update. The Company’s PDC technology was proven to be
effective in the destruction of Influenza H1N1 and Zika viruses at
low nanomolar concentrations. These studies were expanded to
include coronavirus Bio Safety Level (“BSL”) 2. As
a note, COVID-19 is caused by coronavirus (BSL-3), not coronavirus
(BSL-2). A new assay was established to measure coronavirus
destruction and using this new assay the Theralase® PDC technology
was able to destroy coronavirus (BSL-2) with drug doses 5 times
lower than what was used to kill Influenza H1N1 and Zika viruses.
These drug doses demonstrated a 99.995% destruction rate of the
BSL-2 coronavirus and are significantly lower than those used by
the Company to treat cancers; hence considered safe for human use.
Coronaviruses are considered similar in their structure and these
new results strongly suggest that Theralase®’s PDC will be highly
effective against the SARS-CoV-2 (BSL-3) virus responsible for
COVID-19.In April 2021, Theralase® executed a Collaborative
Research Agreement (“CRA”) with the National
Microbiology Laboratory, Public Health Agency of Canada
(“PHAC”) for the research and development of a
Canadian-based SARS-CoV-2 (“COVID-19”) vaccine.
Under the terms of the agreement, Theralase® and PHAC are
collaborating on the development and optimization of a COVID-19
vaccine by treating the SARS-CoV-2 virus grown on cell lines with
Theralase®’s patented PDC and then light activating it with
Theralase®’s proprietary TLC-3000A light technology to inactivate
the virus and create the fundamental building blocks of a COVID-19
vaccine. This inactivated virus would then be purified and used to
inoculate naive animals followed by challenge with the SARS-CoV-2
virus, to ascertain the efficacy of the vaccine. The project is
entitled, “Photo Dynamic Compound Inactivation
of SARS-CoV-2 Vaccine” and
commenced in mid-April 2021.* The Company does not claim or profess
that they have the ability to treat, cure or prevent the
contraction of the COVID-19 Coronavirus.
About Study IIStudy II utilizes
the Therapeutic Dose (0.70 mg/cm2) of TLD-1433 and is focused on
the enrollment and treatment of approximately 100 BCG-Unresponsive
NMIBC CIS patients in up to 20 clinical study sites located in
Canada and the US.
Study II has a:
- Primary endpoint of efficacy (defined by Complete Response
(“CR”) at any point in time
- Secondary endpoint of duration of CR at 360 days post-initial
CR (approximately 450 days post initial Study treatment, assuming
CR is achieved at the 90 day assessment)
- Tertiary endpoint of safety measured by incidence and severity
of Adverse Events (“AEs”) grade 4 or higher that
do not resolve within 450 days post-initial treatment
The FDA, in its 2018 guidance to industry has stated that, “For
single-arm trials of patients with BCG-unresponsive disease, the
FDA defines a CR as at least one of the following:
- Negative cystoscopy and negative (including atypical) urine
cytology
- Positive cystoscopy with biopsy-proven benign or low-grade
NMIBC and negative cytology
- For intravesical therapies without systemic toxicity, the FDA
includes, in the definition of a CR, negative cystoscopy with
malignant urine cytology, if cancer is found in the upper tract or
prostatic urethra and random bladder biopsies are negative.
Intravesical instillation does not deliver the investigational
drug to the upper tract or prostatic urethra; therefore, the
development of disease in these areas cannot be attributed to a
lack of activity of the investigational drug. Thus, sponsors can
consider patients with new malignant lesions of the upper tract or
prostatic urethra, who have received intravesical therapy to have
achieved a CR in the primary analysis; however, sponsors should
record these lesions and conduct sensitivity analyses in which
these patients are not considered to have achieved a CR.“1
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, bacteria and
viruses.
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 Company’s management for 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.
For More
Information:1.866.THE.LASE (843-5273)416.699.LASE (5273)
www.theralase.com
Kristina Hachey CPA, Chief Financial
Officerkhachey@theralase.comwww.theralase.com
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