Profound Medical Corp. (NASDAQ:PROF; TSX:PRN) (“Profound” or the
“Company”), a commercial-stage medical device company that develops
and markets customizable, incision-free therapies for the ablation
of diseased tissue, today reported financial results for the second
quarter ended June 30, 2024. Unless specified otherwise, all
amounts in this press release are expressed in U.S. dollars and are
presented in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards
Board.
Business Highlights
- The TULSA-PRO® systems installed
base grew from 53 at the end of Q1-2024 to 57 as of the end of
Q2-2024; Profound continues to expect that to grow to 75 TULSA-PRO®
systems this year.
- Profound continued to see a wide
variety of prostate disease patients treated by its TULSA-PRO®
customers in the second quarter of 2024:
- 73% were treated for prostate
cancer, 15% were hybrid patients suffering from both prostate
cancer and benign prostatic hyperplasia (“BPH”), 8% were salvage,
and 4% were men with BPH only;
- For cancer grade, 5% were GG1, 50%
were GG2, 34% were GG3, and 11% were GG4 & GG5;
- In terms of ablation, 50% were
whole gland; 29% were sub-total but more than half the gland; and
21% were hemi-ablations or focal therapy; and
- For prostate size, 6% were <
20cc; 45% were 20 – 40cc; 30% were 40-60cc; 12% were 60-100cc; and
7% were over 100cc.
- In May 2024, Profound received U.S.
Food and Drug Administration (“FDA”) clearance for its second
TULSA-AI module, Contouring Assistant, a machine learning-based
prostate segmentation tool designed to assist in efficiently
delineating the prostate and target patient volume. The Company
continues to develop its third TULSA-AI module, TULSA-BPH, for use
in conjunction with the TULSA-PRO® system and expects to provide
additional details on that later this year.
- In July 2024, the U.S. Centers for
Medicare & Medicaid Services (CMS) issued its proposed
outpatient prospective payment system (OPPS) reimbursement rule for
the three new CPT® Category 1 codes and their descriptors covering
the TULSA procedure, with the final rule anticipated in November
2024, which will become effective on January 1, 2025.
- The ongoing Level 1 CAPTAIN trial
comparing the TULSA procedure to radical prostatectomy in men with
localized prostate cancer remains on track to complete patient
enrollment by the end of this year, and Profound anticipates
beginning to report interim data from this post-market study in the
first half of 2025.
“While we continue to make strong commercial
progress, in some ways we are just approaching the starting line as
we make final preparations for the permanent CPT® Category 1 codes
for TULSA going into effect at the beginning of 2025, an
anticipated major inflection point for our business,” said Arun
Menawat, Profound’s CEO and Chairman. “Adequate reimbursement is
generally considered essential for treatment technology innovators
like Profound to drive forward widespread adoption and,
importantly, we believe CMS’ proposed rule for TULSA will put us on
at least a level playing field with competing current
standard-of-care and other prostate disease treatment
modalities.”
Second Quarter 2024 Results
For the quarter ended June 30, 2024, the Company
recorded revenue of $2.23 million, with $1.46 million from
recurring revenue, which consists of the sale of TULSA-PRO®
consumables, lease of medical devices, procedures and services
associated with extended warranties, and $773,000 for one-time sale
of capital equipment. Second quarter 2024 revenue increased 39%
from $1.60 million in the same three-month period a year ago.
Total operating expenses, which consist of
research and development (“R&D”), general and administrative
(“G&A”), and selling and distribution (“S&D”) expenses,
were $9.3 million in the second quarter of 2024, an increase of 24%
compared with $7.5 million in the second quarter of 2023.
Expenditures for R&D for the three months
ended June 30, 2024 were $4.2 million, an increase of 33% compared
with $3.2 million in the three months ended June 30, 2023,
primarily due to various R&D projects undertaken during the
period, which included fixture developments, yield improvements and
additional materials for clinical trials, higher headcount and
lower reimbursement of workforce costs. Partially offsetting these
amounts was a decrease in share-based compensation due to fewer
awards granted to employees.
G&A expenses for the 2024 second quarter
were $2.1 million, essentially unchanged from the same period in
2023. Salaries and benefits increased due to higher cost of living
salary increases. Partially offsetting this was a decrease to
insurance expense due to lower premium rates and a decrease to
general office expenses.
Second quarter 2024 S&D expenses increased
by 32% to $3.0 million, compared with $2.3 million in the second
quarter of 2023. This was driven by increases in salaries and
benefits, consulting fees and travel due to increased salesforce
and commission payments, consultants engaged to assist with Veteran
Affairs and military sales markets, and increased in-person
conferences and customer meetings.
Net finance income for the three months ended
June 30, 2024 was $934,000, compared with net finance expense of
$884,000 in the three months ended June 30, 2023.
Second quarter 2024 net loss was $6.9 million,
or $0.28 per common share, compared to $7.3 million, or $0.35 per
common share, in the three months ended June 30, 2023.
Current 2024 Outlook
As previously disclosed, based on the Company’s
current business planning and budgeting activities, Profound
anticipates its total revenue for full-year 2024 to be in the range
of $11.0 million to $12.0 million, representing total
year-over-year revenue growth of 53% to 67%.
Liquidity and Outstanding Share
Capital
As at June 30, 2024, Profound had cash of $34.1
million.
As at August 8, 2024, Profound had 24,481,835
common shares issued and outstanding.
For complete financial results, please see
Profound’s filings at www.sedarplus.ca, www.sec.gov and on the
Company’s website at www.profoundmedical.com under “Financial” in
the Investors section.
Conference Call Details
Profound Medical is pleased to invite all
interested parties to participate in a conference call today at
4:30 pm ET during which time the results will be discussed.
To participate in the conference call by
telephone, please pre-register via this link to receive the dial-in
number and your unique PIN.
The call will also be broadcast live and
archived on the Company's website at www.profoundmedical.com under
"Webcasts" in the Investors section.
About Profound Medical
Corp.
Profound is a commercial-stage medical device
company that develops and markets customizable, incision-free
therapies for the ablation of diseased tissue.
Profound is commercializing TULSA-PRO®, a
technology that combines real-time MRI, robotically-driven
transurethral ultrasound and closed-loop temperature feedback
control. TULSA-PRO® is designed to provide customizable and
predictable radiation-free ablation of a surgeon-defined prostate
volume while actively protecting the urethra and rectum to help
preserve the patient’s natural functional abilities. TULSA-PRO® has
the potential to be a flexible technology in customizable prostate
ablation, including intermediate stage cancer, localized
radio-recurrent cancer, retention and hematuria palliation in
locally advanced prostate cancer, and the transition zone in large
volume benign prostatic hyperplasia (“BPH”). TULSA-PRO® is CE
marked, Health Canada approved, and 510(k) cleared by the U.S. Food
and Drug Administration (“FDA”).
Profound is also commercializing Sonalleve®, an
innovative therapeutic platform that is CE marked for the treatment
of uterine fibroids and palliative pain treatment of bone
metastases. Sonalleve® has also been approved by the China National
Medical Products Administration for the non-invasive treatment of
uterine fibroids and has FDA approval under a Humanitarian Device
Exemption for the treatment of osteoid osteoma. The Company is in
the early stages of exploring additional potential treatment
markets for Sonalleve® where the technology has been shown to have
clinical application, such as non-invasive ablation of abdominal
cancers and hyperthermia for cancer therapy.
Forward-Looking Statements
This release includes forward-looking statements
regarding Profound and its business which may include, but is not
limited to, any express or implied statements regarding current or
future financial performance and position, including the Company’s
year 2024 financial outlook and related assumptions; the
expectations regarding the efficacy of Profound’s technology in the
treatment of prostate cancer, BPH, uterine fibroids, palliative
pain treatment and osteoid osteoma; and its future
revenues/financial results. 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
medical device industry, regulatory approvals, reimbursement,
economic factors, the equity markets generally and risks associated
with growth and competition, statements and projections regarding
financial guidance and goals and the attainment of such goals may
differ from actual results based on market factors and Profound’s
ability to execute its operational and budget plans; and actual
financial results may not be consistent with expectations,
including that revenue, operating expenses and cash usage may not
be within management's expected ranges. For additional risks,
please see the Company’s annual information form for the year ended
December 31, 2023 and other disclosure documents available on
www.sedarplus.ca and www.sec.gov. 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.
Financial Outlook
This press release contains a financial outlook
within the meaning of applicable securities laws. The financial
outlook has been prepared by management of the Company to provide
an outlook for the Company’s forecasted revenue for the 12 months
to be ended December 31, 2024 and may not be appropriate for any
other purpose. The financial outlook has been prepared based on a
number of assumptions including the assumptions discussed under the
heading “Forward-Looking Statements” herein. The actual results of
the Company’s operations for any period may vary from the amounts
set forth in these projections and such variations may be material.
The Company and its management believe that the financial outlook
has been prepared on a reasonable basis. However, because this
information is highly subjective and subject to numerous risks,
including the risks discussed under the heading “Forward-Looking
Statements” herein, it should not be relied on as necessarily
indicative of future results.
For further information, please
contact:Stephen KilmerInvestor
Relationsskilmer@profoundmedical.com T: 647.872.4849
Profound Medical Corp.Interim
Condensed Consolidated Balance Sheets(Unaudited)
|
June
30,2024$ |
|
|
December 31,2023$ |
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
Current assets |
|
|
|
Cash |
34,079 |
|
|
26,213 |
|
Trade and other receivables |
7,162 |
|
|
7,288 |
|
Inventory |
6,732 |
|
|
6,989 |
|
Prepaid expenses and deposits |
517 |
|
|
1,406 |
|
Total current assets |
48,490 |
|
|
41,896 |
|
|
|
|
|
Property and equipment |
680 |
|
|
909 |
|
Intangible assets |
374 |
|
|
490 |
|
Right-of-use assets |
488 |
|
|
616 |
|
|
|
|
|
Total assets |
50,032 |
|
|
43,911 |
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
Accounts payable and accrued liabilities |
2,671 |
|
|
3,282 |
|
Deferred revenue |
676 |
|
|
721 |
|
Long-term debt |
2,024 |
|
|
2,104 |
|
Lease liability |
258 |
|
|
259 |
|
Total current liabilities |
5,629 |
|
|
6,366 |
|
|
|
|
|
Deferred tax liability |
59 |
|
|
59 |
|
Long-term debt |
3,943 |
|
|
5,000 |
|
Deferred revenue |
735 |
|
|
728 |
|
Lease liability |
427 |
|
|
578 |
|
|
|
|
|
Total liabilities |
10,793 |
|
|
12,731 |
|
|
|
|
|
Shareholders’ Equity |
|
|
|
|
|
|
|
Share capital |
230,842 |
|
|
217,393 |
|
Contributed surplus |
20,138 |
|
|
19,687 |
|
Accumulated other comprehensive income |
19,308 |
|
|
12,031 |
|
Deficit |
(231,049 |
) |
|
(217,931 |
) |
|
|
|
|
Total Shareholders’ Equity |
39,239 |
|
|
31,180 |
|
|
|
|
|
Total Liabilities and Shareholders’ Equity |
50,032 |
|
|
43,911 |
|
Profound Medical Corp.Interim
Condensed Consolidated Statements of Loss and Comprehensive
Loss(Unaudited)
|
ThreemonthsendedJune
30,2024$ |
|
|
ThreemonthsendedJune
30,2023$ |
|
SixmonthsendedJune
30,2024$ |
|
|
SixmonthsendedJune
30,2023$ |
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
Recurring - non-capital |
1,460 |
|
|
1,602 |
|
2,942 |
|
|
3,069 |
Capital equipment |
773 |
|
|
- |
|
1,201 |
|
|
393 |
|
2,233 |
|
|
1,602 |
|
4,143 |
|
|
3,462 |
Cost of sales |
795 |
|
|
552 |
|
1,436 |
|
|
1,199 |
Gross profit |
1,438 |
|
|
1,050 |
|
2,707 |
|
|
2,263 |
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
Research and development |
4,193 |
|
|
3,155 |
|
8,126 |
|
|
6,995 |
General and administrative |
2,109 |
|
|
2,080 |
|
4,496 |
|
|
4,186 |
Selling and distribution |
2,969 |
|
|
2,251 |
|
5,400 |
|
|
4,356 |
Total operating expenses |
9,271 |
|
|
7,486 |
|
18,022 |
|
|
15,537 |
|
|
|
|
|
|
|
|
Operating loss |
7,833 |
|
|
6,436 |
|
15,315 |
|
|
13,274 |
|
|
|
|
|
|
|
|
Net finance expense/(income) |
(934 |
) |
|
884 |
|
(2,256 |
) |
|
739 |
|
|
|
|
|
|
|
|
Loss before income taxes |
6,899 |
|
|
7,320 |
|
13,059 |
|
|
14,013 |
|
|
|
|
|
|
|
|
Income taxes expense |
20 |
|
|
35 |
|
59 |
|
|
83 |
|
|
|
|
|
|
|
|
Net loss attributed to shareholders for the
period |
6,919 |
|
|
7,355 |
|
13,118 |
|
|
14,096 |
|
|
|
|
|
|
|
|
Other comprehensive (income)/loss |
|
|
|
|
|
|
|
Item that may be reclassified to loss |
|
|
|
|
|
|
|
Foreign currency translation adjustment- net of tax |
(2,068 |
) |
|
4,117 |
|
(7,277 |
) |
|
4,164 |
Net loss and comprehensive loss for the
period |
4,851 |
|
|
11,472 |
|
5,841 |
|
|
18,260 |
|
|
|
|
|
|
|
|
Loss per share |
|
|
|
|
|
|
|
Basic and diluted loss per common share |
0.28 |
|
|
0.35 |
|
0.54 |
|
|
0.67 |
Profound Medical Corp.Interim
Condensed Consolidated Statements of Cash Flows(Unaudited)
|
Six monthsended June 30,
2024$ |
|
Six monthsended June
30,2023$ |
|
|
|
|
Operating activities |
|
|
Net loss for the period |
(13,118 |
) |
(14,096 |
) |
Adjustments to reconcile net loss to net cash flows from operating
activities: |
|
|
Depreciation of property and equipment |
383 |
|
351 |
|
Amortization of intangible assets |
101 |
|
101 |
|
Depreciation of right-of-use assets |
108 |
|
108 |
|
Share-based compensation |
1,535 |
|
1,783 |
|
Interest and accretion expense |
339 |
|
384 |
|
Deferred revenue |
18 |
|
142 |
|
Change in fair value of derivative financial instrument |
- |
|
232 |
|
Net change in amortized cost of trade and other receivables |
(168 |
) |
(79 |
) |
Changes in non-cash working capital balances |
|
|
Trade and other receivables |
13 |
|
(27 |
) |
Prepaid expenses and deposits |
859 |
|
465 |
|
Inventory |
(168 |
) |
(191 |
) |
Accounts payable and accrued liabilities |
(508 |
) |
334 |
|
Income taxes payable |
2 |
|
16 |
|
Foreign exchange on cash |
(844 |
) |
(465 |
) |
Net cash flow used in operating activities |
(11,448 |
) |
(10,942 |
) |
|
|
|
Financing activities |
|
|
Issuance of common shares |
22,938 |
|
- |
|
Transactions costs paid |
(1,859 |
) |
- |
|
Payment of long-term debt |
(1,227 |
) |
(372 |
) |
Proceeds from share options exercised |
1 |
|
239 |
|
Proceeds from warrants exercised |
- |
|
2,423 |
|
Payment of lease liability |
(145 |
) |
(146 |
) |
Total cash flow from financing activities |
19,708 |
|
2,144 |
|
|
|
|
Net change in cash during the period |
8,260 |
|
(8,798 |
) |
Foreign exchange on cash |
(394 |
) |
1,556 |
|
Cash – Beginning of period |
26,213 |
|
46,517 |
|
Cash – End of period |
34,079 |
|
39,275 |
|
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