TORONTO, Nov. 07, 2019 (GLOBE NEWSWIRE) -- Profound Medical Corp. (NASDAQ:PROF; TSX:PRN) (“Profound” or the “Company”), the only company to provide customizable, incision-free therapies which combine real-time Magnetic Resonance Imaging (“MRI”), thermal ultrasound and closed-loop temperature feedback control for the radiation-free ablation of diseased tissue, today reported financial results for the three and nine months ended September 30, 2019, and provided an update on its operations.

Recent Corporate Highlights

  • On July 9, 2019, Profound announced that it had sold its first TULSA-PRO® system in Japan to Hokuyu Hospital in Sapporo via Japan's Pharmaceutical and Medical Device Act’s expanded access program.
     
  • On August 15, 2019, Profound announced the appointment of accomplished financial executive Steve Forte to its Board of Directors.
     
  • On August 16, 2019, Profound announced that it received 510(k) clearance from the U.S. Food and Drug Administration (“FDA”) to market TULSA-PRO® for ablation of prostate tissue and indicated that it expects to commence the product’s U.S. commercial launch in Q4-2019.
     
  • On September 20, 2019, Profound announced the closing of an offering of units of the Company (the “Units”), including the full exercise of the over-allotment option, for 10,454,546 Units sold at a price of $1.10 per Unit for gross proceeds of $11,500,001.
     
  • On October 16, 2019, Profound effected a 10:1 share consolidation in anticipation of its listing on Nasdaq.
     
  • On October 29, 2019, Profound’s common shares commenced trading on the Nasdaq Capital Market under the symbol “PROF”; in addition, its common shares continue to trade on the Toronto Stock Exchange under the symbol “PRN.”

“The compelling TACT pivotal trial data announced earlier in the year continues to drive TULSA-PRO® adoption in Europe, as reflected by higher third quarter 2019 recurring revenues,” said Arun Menawat, Profound’s CEO. “Since the recent receipt of FDA clearance to market TULSA-PRO® in the United States, our main focus has been on commercialization and we have already visited some 75 U.S. institutions. We are very encouraged by the resounding interest in adopting the technology, such that we expect to have a first commercial TULSA-PRO® site operational and treating patients before year-end.”

Summary Third Quarter 2019 Results

All amounts, unless specified otherwise, are expressed in Canadian dollars and are presented in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting.

For the quarter ended September 30, 2019, the Company recorded revenue of $682,224, with $528,578 from the sale of products and $153,646 from installation and training services. This represented recurring revenue growth of 125% year-over-year and 17% sequentially over the previous quarter, as there was no new system sales revenue recorded during the Q3-2018, Q2-2019 and Q3-2019 periods. 

“Although we have two Sonalleve® purchase orders in hand, both sites have experienced installation delays,” said Dr. Menawat. “Had installation of both systems been completed as anticipated, third quarter revenues would have been approximately $1.9 million. Despite this shift in timing, we do expect to complete delivery of both systems by the end of the year, with related revenue realized in the fourth quarter.”  

The Company recorded a net loss for the three months ended September 30, 2019 of $6,269,904, or $0.57 per common share, compared to a net loss of $5,134,966 or $0.48 per common share, for the three months ended September 30, 2018. The increase in net loss was primarily attributed to increases in R&D expenses, G&A expenses and net finance costs of $847,200, $288,559 and $238,715, respectively. This was offset by a decrease in selling and distribution expenses of $22,291 and an increase in gross profits of $224,245.

Expenditures for R&D for the three months ended September 30, 2019 were higher by $847,200 compared to the three months ended September 30, 2018. Clinical trial costs, materials, consulting fees, travel, share based compensation and salaries and benefits and other expenses increased by $59,314, $397,625, $158,783, $38,982, $121,423, $102,719 and $45,826, respectively. These increases were due to increased spending and testing for R&D and FDA regulatory projects, analysis of TACT clinical data and TACT renewal fees, options vesting for employees and increased R&D personnel. Offsetting these amounts were decreases in rent of $107,716, due to the adoption of IFRS 16 resulting in the recognition of lower rental costs. Depreciation expenses increased by $25,731 due to the adoption of IFRS 16 with the depreciation of the right-of-use assets.

G&A expenses for the third quarter of 2019 increased by $288,559 compared to the three months ended September 30, 2018. Share based compensation increased by $225,500 due to options issued to employees. Depreciation expenses increased by $51,659 due to the adoption of IFRS 16 with the depreciation of the right-of-use assets.

Liquidity and Outstanding Share Capital

As at September 30, 2019, the Company had cash of $27,227,299. 

As at November 7, 2019, Profound had an unlimited number of authorized common shares with 11,852,749 common shares issued and outstanding.

For complete financial results, please see our filings at www.sedar.com and our website at www.profoundmedical.com.

Conference Call Details

Profound Medical is pleased to invite all interested parties to participate in a conference call today, November 7, 2019, at 4:30 pm ET during which time the results will be discussed.

Live Call:    1-877-407-9210 (Canada and the United States)
  1-201-689-8049 (International)
   
Replay: 1-877-481-4010
Replay ID: 55908

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 develops and markets customizable, incision-free therapies for the ablation of diseased tissue.

Profound is commercializing TULSA-PRO®, a novel 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® is demonstrating 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 and received 510(k) clearance from the U.S. Food and Drug Administration in August 2019.

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. 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, the expectations regarding the efficacy of Profound’s technology in the treatment of prostate cancer, uterine fibroids and palliative pain treatment. 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 pharmaceutical industry, economic factors, the equity markets generally and risks associated with growth and competition. 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.

For further information, please contact:

Stephen Kilmer
Investor Relations
skilmer@profoundmedical.com
T: 647.872.4849

     
Profound Medical Corp.
Interim Condensed Consolidated Balance Sheets
(Unaudited)
     
  September 30,
2019
$
  December 31,
2018
$
 
     
Assets    
     
Current assets    
Cash 27,227,299  30,687,183 
Trade and other receivables 1,474,636  2,686,112 
Investment tax credits receivable 240,000  480,000 
Inventory 3,650,609  3,631,623 
Prepaid expenses and deposits 414,613  434,871 
Total current assets 33,007,157  37,919,789 
     
Property and equipment 784,766  1,207,357 
Intangible assets 3,417,232  4,013,561 
Right-of-use assets 2,297,088  - 
Goodwill 3,409,165  3,409,165 
     
Total assets 42,915,408  46,549,872 
     
Liabilities    
     
Current liabilities    
Accounts payable and accrued liabilities 2,735,984  3,912,350 
Deferred revenue 606,218  312,558 
Long-term debt 4,613,931  1,339,583 
Provisions 115,776  1,352,017 
Other liabilities 651,170  567,296 
Derivative financial instrument 223,084  98,203 
Lease liabilities 216,984  - 
Income taxes payable -  297,353 
Total current liabilities 9,163,147  7,879,360 
     
Long-term debt 7,539,690  10,615,662 
Deferred revenue 434,613  379,044 
Provisions 26,894  49,319 
Other liabilities 233,010  1,000,153 
Lease liabilities 2,218,980  - 
     
Total liabilities 19,616,334  19,923,538 
     
Shareholders’ Equity    
     
Share capital 130,395,091  120,932,404 
Contributed surplus 18,954,077  16,756,294 
Accumulated other comprehensive loss (136,128) (28,703)
Deficit (125,913,966) (111,033,661)
     
Total Shareholders’ Equity 23,299,074  26,626,334 
     
Total Liabilities and Shareholders’ Equity 42,915,408  46,549,872 


         
Profound Medical Corp.
Interim Condensed Consolidated Statements of Loss and Comprehensive Loss
(Unaudited)
         
 Three
months
ended
September 30,
2019
$
 Three
months
ended
September 30,
2018
$
 Nine
months

ended
September 30,
2019
$
 Nine
months

ended
September 30,
2018
$
 
     
Revenue    
Products528,578 249,548 2,342,199 792,973 
Services153,646 54,116 389,922 100,369 
 682,224 303,664 2,732,121 893,342 
Cost of sales 395,001 240,686 1,172,423 598,020 
Gross profit 287,223 62,978 1,559,698 295,322 
     
Operating Expenses     
Research and development - net of investment tax credits of $nil (2018 – $180,000)3,424,585 2,577,385 9,288,686 7,442,075 
General and administrative2,054,099 1,765,540 5,154,535 5,305,273 
Selling and distribution – net of revenue share obligation reversal873,761 896,052 1,499,285 2,956,179 
Total operating expenses6,352,445 5,238,977 15,942,506 15,703,527 
     
Operating Loss6,065,222 5,175,999 14,382,808 15,408,205 
     
Other income and expense    
Finance costs269,613 81,468 921,518 715,037 
Finance income(104,631)(155,201)(357,302)(312,362)
 164,982 (73,733)564,216 402,675 
Loss before income taxes6,230,204 5,102,266 14,947,024 15,810,880 
     
Income taxes39,700 32,700 93,700 93,300 
     
Net loss for the period6,269,904 5,134,966 15,040,724 15,904,180 
     
Other comprehensive loss    
Item that may be reclassified to profit or loss    
Foreign currency translation adjustment - net of tax of nil(49,193)28,176 (107,425)13,481 
Net loss and comprehensive loss for the period6,220,711 5,163,142 14,933,299 15,917,661 
     
Loss per share     
Basic and diluted net loss per share0.57 0.48 1.39 1.63 


 
Profound Medical Corp.
Interim Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
 Nine months
ended
September 30,
2019
$
 Nine months
ended
September 30,
2018
$
 
   
Operating activities  
Net loss for the period(15,040,724)(15,904,180)
Adjustments to reconcile net loss to net cash flows from operating activities:  
Depreciation of property and equipment365,604 416,071 
Amortization of intangible assets846,329 846,328 
Depreciation of right-of-use assets305,389 - 
Share-based compensation1,050,583 753,549 
Interest and accretion expense1,028,680 770,714 
Change in deferred rent- 26,718 
Deferred revenue349,229 283,499 
Change in fair value of derivative financial instrument124,881 (71,270)
Change in fair value of contingent consideration(371,561)(106,976)
Changes in non-cash working capital balances  
Investment tax credits receivable240,000 (180,000)
Trade and other receivables1,211,476 3,109,883 
Prepaid expenses and deposits(189,742)45,051 
Inventory(18,986)(1,850,738)
Accounts payable and accrued liabilities(1,223,625)(2,328,746)
Provisions(1,209,347)172,675 
Income taxes payable(297,353)93,145 
Net cash flow used in operating activities(12,829,167)(13,924,277)
   
Investing activities  
Purchase of intangible assets(250,000)- 
Total cash used in investing activities(250,000)- 
   
Financing activities  
Issuance of common shares11,500,001 34,500,000 
Transaction costs paid(895,513)(2,472,498)
Proceeds from bank loan- 12,500,000 
Bank loan costs paid- (714,134)
Payment of other liabilities(16,203)(165,456)
Payment of long-term debt and interest(735,717)(5,719,845)
Proceeds from share options exercised5,399 105,256 
Payment of lease liabilities(238,684)- 
Total cash from financing activities9,619,283 38,033,323 
   
Net change in cash during the period(3,459,884)24,109,046 
Cash – Beginning of period30,687,183 11,103,223 
Cash – End of period27,227,299 35,212,269