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
2021 financial statements.
Financial Highlights:
For the years ended December 31st:
Audited Consolidated Statements of Operations In
Canadian Dollars |
2021 |
2020 |
% Change |
Revenue |
|
|
|
Canada |
697,727 |
|
815,159 |
|
-14 |
% |
United States |
69,725 |
|
87,923 |
|
-21 |
% |
International |
13,189 |
|
26,040 |
|
-49 |
% |
Total Revenue |
780,641 |
|
929,122 |
|
-16 |
% |
|
|
|
|
Cost of Sales |
470,698 |
|
659,442 |
|
-29 |
% |
Gross Margin |
309,943 |
|
269,680 |
|
15 |
% |
Gross Margin as a percentage of sales |
40 |
% |
29 |
% |
|
|
|
|
|
Operating Expenses |
|
|
|
Selling Expenses |
363,886 |
|
447,882 |
|
-19 |
% |
Administrative Expenses |
1,562,867 |
|
2,070,261 |
|
-25 |
% |
Research and Development Expenses – CLT Division |
308,708 |
|
230,936 |
|
34 |
% |
Research and Development Expenses – ACT Division |
2,616,025 |
|
3,217,307 |
|
-19 |
% |
Other(1) |
-130,481 |
|
-98,166 |
|
33 |
% |
Total Operating Expenses |
4,721,004 |
|
5,868,220 |
|
-20 |
% |
|
|
|
|
Net Loss |
-4,411,061 |
|
-5,598,540 |
|
-21 |
% |
(1) Other represents gain from
legal settlement, (gain) loss on foreign exchange, interest
accretion on lease liabilities and interest incomeTotal revenue
decreased 16%, year over year, and is primarily attributed to the
slower than anticipated Canadian and US economic recovery from the
COVID-19 pandemic in 2021.
Cost of sales for the year ended December 31,
2021 was $470,698 or 60% of revenue resulting in a gross margin of
$309,943 or 40% of revenue. In comparison, the cost of sales in
2020 was $659,442 or 71% of revenue resulting in a gross margin of
$269,680 or 29% of revenue. The gross margin increase, as a
percentage of sales, year over year, is primarily attributed to a
decrease in labour and material costs.
Selling expenses for the year ended December 31,
2021, decreased to $363,886, from $447,882 in 2020, a 19% decrease.
The decrease in selling expenses is primarily attributed to the
COVID-19 pandemic, resulting in reduced advertising (43%),
commissions (17%) and salaries (8%).
Administrative expenses for the year ended
December 31, 2021, decreased to $1,562,867 from $2,070,261 in 2020,
a 25% decrease. The decrease in administrative expenses is
primarily attributed to decreased spending on director and advisory
fees (37%) and general and administrative expenses (21%). Stock
based compensation expense decreased 63% in 2021 due to a reduction
in stock options granted.
Net research and development expenses for the
year ended December 31, 2021, decreased to $2,924,733 from
$3,448,243 in 2020, a 15% decrease. The decrease in research and
development expenses for the year ended December 31, 2021, is
primarily attributed to the significant delay in patient enrollment
and treatment in the Phase II NMIBC clinical study (“Study
II”) due to the COVID-19 pandemic. Research and
development expenses represented 62% of the Company’s operating
expenses and represents investment primarily into the research and
development of the Company’s ACT technology.
The net loss for the year ended December 31,
2021 was $4,411,061 which included $618,586 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
$5,598,540 which included $1,202,017 of net non-cash expenses. The
ACT division represented $3,426,488 of this loss (78%) for the year
ended December 31, 2021.
The decrease in net loss is primarily attributed
to the following:
1) Significant delay in patient
enrollment and treatment due to the COVID-19 pandemic, resulting in
decreased research and development expenses in Study II.
2) 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:
1. Break Through Designation Update. In 2020,
the FDA granted Theralase® Fast Track Designation
(“FTD”) for Study II. As a Fast Track designee,
Theralase® has access to early and frequent communications with the
FDA to discuss Theralase®’s development plans and ensure the timely
collection of clinical data to support the approval process. FTD
can also lead to Break Through Designation
(“BTD”), Accelerated Approval
(“AA”) and/or Priority Review, if certain criteria
are met, which the FDA has previously defined to the Company for
BTD to represent a complete clinical dataset on approximately 20 to
25 patients enrolled, treated and followed-up, who demonstrate
significant safety and efficacy clinical outcomes.
In 2021, Theralase® completed its first significant milestone of
Study II by enrolling and treating 25 patients. The Company will
compile a clinical data report for submission to the FDA in support
of the grant of a BTD approval after completion of the 450 day
assessment for 25 patients, expected in 4Q2022, subject to the
Clinical Study Sites (“CSS”) availability to complete all required
assessments.
2. COVID-19 Pandemic Update. In the ACT
division, the Company continues to experience delays in patient
enrollment and treatment rates in Study II due to the ongoing
COVID-19 pandemic; however, these rates have improved as Canada and
the US commence their recovery from the business and economic
impacts of the COVID-19 pandemic.
In the CLT division, the Company continues to experience
variations in sales and the timing of these sales due to the
ongoing COVID-19 pandemic and has taken actions to minimize
expenses by eliminating non-essential personnel and imposing a
temporary hiring freeze commencing in March 2020. The Company
lifted the temporary hiring freeze in 4Q2021, now that the Canadian
and United States (“US”) economies have started to
demonstrate a sustainable business and economic recovery from
COVID-19.
3. Clinical study site status and update. The
Company has successfully launched five CSS in Canada and seven CSSs
in the US that are open for patient enrollment and treatment for a
total of 12 CSSs.
To date, the phase II NMIBC clinical study has enrolled and
provided the primary study treatment for 35 patients (including
three patients from Phase Ib study treated at the Therapeutic Dose)
for a total of 38 patients.
The interim analysis of the Study II Evaluable
Patient clinical data (with 3 patients from Study Ib)
supports the following provisional conclusions:
PatientAssessment Visit |
EvaluablePatients* |
CompleteResponse (“CR”) |
PartialResponse (“PR”) |
Total Response(CR + PR) |
90 Days |
35 |
49% |
17% |
66% |
180 Days |
30 |
47% |
20% |
67% |
270 Days |
23 |
39% |
9% |
48% |
360 Days |
21 |
24% |
14% |
38% |
450 Days |
21 |
24% |
10% |
34% |
Note: Evaluable Patients
are defined as patients who have evaluable data; hence, have been
evaluated by the principal investigator and thus excludes patients
who have clinical data pending.
For evaluable patients, who completed Study II,
who achieved a CR at 90 days, 78% continue to demonstrate that CR
at 180 and 270 days, while 56% continue to demonstrate that CR at
360 and 450 days.
Note: The current interim
analysis presented above, should be read with caution, as the
reported clinical data is extremely interim in its presentation, as
Study II is still ongoing and new clinical data collected may or
may not continue to support the current trends.
Note: The data
analysis is only a representation of the data accrued to date with
and does not intend to represent a tendency or portray any
conclusion as to the effectiveness, duration or safety of the
investigational treatment. A significant number of treated patients
are still pending assessments.
For a more comprehensive analysis of the interim
data please refer to Management’s Discussion and Analysis
(“MD&A”) for the year ended December 31,
2021.
4. 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 4Q2022.5. COVID-19 Research
Update. 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.In February, 2022 Theralase® reported
that PHAC had demonstrated that light-activated TLD-1433, was
effective in rapidly inactivating the SARS-CoV-2 virus by up to
99.99%, compared to control in an in vitro study. Further research
is required to confirm these findings.
These results have now laid the groundwork for
the next phase of the CRA, which is evaluating the Theralase®
COVID-19 vaccine in the ability to prevent animals from contracting
COVID-19, when exposed to the virus, which is expected to commence
in 2Q2022 and be completed by 4Q2022.
Note: 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 of TLD-1433 (0.70 mg/cm2) activated by the
proprietary TLC-3200 medical laser system. Study II is focused on
enrolling and treating approximately 100 to 125 BCG-Unresponsive
NMIBC Carcinoma In-Situ (“CIS”) patients in up to
15 Clinical Study Sites (“CSS”) located in Canada
and the United States.
About TLD-1433TLD-1433 is a patented PDC with
over 10 years of published peer reviewed preclinical research and
is currently under investigation in Study II.
About Theralase® Technologies
Inc.Theralase® is a clinical stage pharmaceutical company
dedicated to the research and development of light activated
compounds and their associated drug formulations with a primary
objective of efficacy and a secondary objective of safety in the
destruction of various cancers, bacteria and viruses.
Additional information is available
at www.theralase.com and www.sedar.com
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Forward Looking Statements
This news release contains “forward-looking
statements” within the meaning of applicable Canadian
securities laws. 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 and
a COVID-19 vaccine. Forward looking statements may be identified by
the use of the words “may”,
“should”, “will”,
“anticipates”, “believes”,
“plans”, “expects”,
“estimate”, “potential
for” and similar expressions including statements
related to the current expectations of Company’s management for
future research, development and commercialization of the Company’s
Photo Dynamic Compounds and their drug formulations, including
preclinical research, clinical studies and regulatory
approvals.
These statements involve significant risks,
uncertainties and assumptions; including, the ability of the
Company to: adequately fund, and secure the requisite regulatory
approvals to successfully complete a Phase II NMIBC clinical study
in a timely fashion and implement its development plans. Other
risks include: the ability of the Company to successfully
commercialize its drug formulations, the risk that access to
sufficient capital to fund the Company’s operations may not be
available or may not be available on terms that are commercially
favorable to the Company, the risk that the Company’s drug
formulations may not be effective against the diseases tested in
its clinical studies, the risk that the Company’s fails to comply
with the term of license agreements with third parties and as a
result loses the right to use key intellectual property in its
business, the Company’s ability to protect its intellectual
property, the timing and success of submission, acceptance and
approval of regulatory filings, and the impacts of public health
crises, such as COVID-19. Many of these factors that will determine
actual results are beyond the Company’s ability to control or
predict.
Readers should not unduly rely on these forward-
looking statements which are not a guarantee of future performance.
There can be no assurance that forward looking statements will
prove to be accurate as such forward looking statements involve
known and unknown risks, uncertainties and other factors which may
cause actual results or future events to differ materially from 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.
All forward-looking statements are made as of
the date hereof and are subject to change. Except as required by
law, the Company assumes no obligation to update such
statements.
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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