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 has released the Company’s unaudited 1Q2022
condensed interim consolidated Financial Statements
(“
Financial Statements”).
Financial Highlights:
For the three-month period ended March 31st:
Audited Consolidated Statements of OperationsIn
Canadian Dollars |
2022 |
|
2021 |
|
% Change |
Revenue |
|
|
|
Canada |
179,145 |
|
104,406 |
|
72% |
|
United States |
32,517 |
|
20,377 |
|
60% |
|
Total Revenue |
211,662 |
|
124,783 |
|
70% |
|
|
|
|
|
Cost of Sales |
120,430 |
|
74,463 |
|
62% |
|
Gross Margin |
91,232 |
|
50,320 |
|
81% |
|
Gross Margin as a percentage of sales |
43% |
|
40% |
|
|
|
|
|
|
Operating Expenses |
|
|
|
Selling Expenses |
87,640 |
|
95,780 |
|
-8% |
|
Administrative Expenses |
418,087 |
|
418,454 |
|
1% |
|
Research and Development Expenses – CLT Division |
72,832 |
|
54,616 |
|
33% |
|
Research and Development Expenses – ACT Division |
1,225,203 |
|
534,951 |
|
129% |
|
Other(1) |
-11,040 |
|
-134,388 |
|
-92% |
|
Total Operating Expenses |
1,792,721 |
|
969,413 |
|
85% |
|
|
|
|
|
Net Loss |
-1,701,489 |
|
-919,093 |
|
85% |
|
(1) Other
represents gain from legal settlement, (gain) loss on foreign
exchange, interest accretion on lease liabilities and interest
incomeTotal revenue increased 70%, year over year, and is primarily
attributed to the anticipated Canadian and US economic recovery
from the COVID-19 pandemic in 2020 and 2021.
Cost of sales for the three-month period ended
March 31, 2022 was $120,430 or 57% of revenue resulting in a gross
margin of $91,232 or 43% of revenue. In comparison, the cost of
sales in 2021 was $74,463 or 60% of revenue resulting in a gross
margin of $50,320 or 40% 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 three-month period
ended March 31, 2022, decreased to $87,640, from $95,780 in 2021,
an 8% decrease. The decrease in selling expenses is primarily
attributed to the COVID-19 pandemic, resulting in reduced
advertising (48%), and salaries (8%).
Administrative expenses for the three-month
period ended March 31, 2022, decreased slightly to $418,087 from
$418,454 in 2021, a 1% decrease. The decrease in administrative
expenses is primarily attributed to decreased spending in
administrative salaries (4%) and insurance expenses (8%). Stock
based compensation expense decreased 61% in 2022 due to a reduction
in stock options granted.
Net research and development expenses for the
three-month period ended March 31, 2022, increased to $1,298,035
from $589,567 in 2021, a 120%. The increase in research and
development expenses for the three-month period ended March 31,
2022, is primarily attributed to the costs related to Study II.
Research and development expenses represented 72% 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, 2022 was $1,701,489 which included $99,600 of net
non-cash expenses (i.e.: amortization, stock-based compensation
expense and foreign exchange gain/loss). This compared to a net
loss in 2021 of $919,093 which included $179,925 of net non-cash
expenses. The ACT division represented $1,436,985 of this loss
(84%) for the three-month period ended March 31, 2022.
The increase in net loss is primarily attributed
to Increased spending in research and development expenses in Study
II.
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 38 patients (including three
patients from Phase Ib study treated at the Therapeutic Dose) for a
total of 41 patients.An analysis of Evaluable Patients (defined as
patients who have been evaluated by the principal investigator and
thus excludes data pending), Study II clinical data provides the
following interim analysis:
Assessment |
90 Day |
180 Day |
270 Day |
360 Day |
450 Day |
Complete Response (“CR”) |
46% |
50% |
39% |
22% |
23% |
Partial Response (“PR”) |
22% |
22% |
8% |
17% |
9% |
Total Response (“CR + PR”) |
68% |
72% |
46% |
39% |
32% |
For all Evaluable
Patients, who achieved a CR at 90 days, 88% demonstrate that CR at
180 days, 69% at 270 days, 50% at 360 days and 56% at 450 days,
demonstrating a strong duration of complete response.
Note: The current interim data analysis
presented above should be read with caution, as the clinical data
is interim in its presentation, as Study II is ongoing and new
clinical data collected may or may not continue to support the
current trends, with significant data still pending.
For a more
comprehensive analysis of the interim data please refer to
Managements Discussion and Analysis (“MD&A”)
for the three-month period ended March 31, 2022.
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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