Profound Medical Announces Second Quarter 2017 Financial Results

TORONTO, Aug. 23, 2017 (GLOBE NEWSWIRE) -- Profound Medical Corp. (TSXV:PRN) (OTCQX:PRFMF) (“Profound” or the “Company”), the only company to provide a therapeutic platform that provides the precision of real-time MR imaging combined with the safety and ablation power of directional (inside-out) and focused (outside-in) ultrasound technology for the incision-free ablation of diseased tissue, today reported financial results for the three and six months ended June 30, 2017. 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.

Corporate Highlights

  • On April 18, 2017, the Company announced Depository Trust Company, or DTC, eligibility for its common shares listed on the OTCQX.
  • On June 30, 2017, Profound announced that it had entered into a definitive agreement to expand the existing collaboration between the two companies and acquire Royal Philips’ (“Philips”) Sonalleve business.
  • On July 31, 2017 Profound completed the acquisition of the Sonalleve business from Philips, establishing Profound as a market leader in MR-Ultrasound ablation therapy.

“With the continued success in the pilot commercial launch of the TULSA-PRO® system in Europe, and the recent acquisition of Philips’ Sonalleve business, Profound has begun to make the leap from product to platform, offering real-time MR-guidance as the imaging platform and ultrasound as the energy source for the delivery of non-invasive ablative technology to clinicians,” commented Dr. Arun Menawat, Profound’s CEO. “The integration of Sonalleve, including the transfer of staff and know how, began almost immediately after we reached a definitive agreement with Philips, and, thanks to the hard work and dedication of everyone involved, that has allowed for a very smooth transition thus far. We look forward to updating our stakeholders as we progress.”

Summary Second Quarter 2017 Results

For the quarter ended June 30, 2017, the Company recorded revenues of $957,139, with $919,845 from sale of products and $37,294 from installation and training services, related to the pilot commercial launch of the TULSA-PRO® system in Europe.  The second quarter 2017 revenues compared to $nil in the second quarter of 2016, and reflected a 62% increase sequentially over $591,517 in the previous quarter.

The Company recorded a net loss for the three months ended June 30, 2017 of $4,658,493, or $0.08 per common share, compared with a net loss of $3,640,725, or $0.09 per common share, for the three months ended June 30, 2016. For the three months ended June 30, 2017, the increase in net loss was primarily attributed to an increase in selling and distribution expenses of $597,870 and an increase in administrative expenses of $814,090, partially offset by gross profits of $485,780.

Expenditures for R&D for the three months ended June 30, 2017 were higher by $201,876 compared to the three months ended June 30, 2016. Overall, the increase in R&D spending was attributed to the ramp-up of the Company’s clinical trial activities. Clinical trial costs, consulting fees and travel increased by $527,546, $231,868 and $51,148, respectively, resulting from ongoing activities related to the initiation of clinical sites visits, enrollment initiatives and patient treatment. Offsetting this amount was a decrease in materials and rent expenses by $431,085 and $88,586, respectively. These costs were lower compared to the three months ended June 30, 2016, due to lower development initiatives associated with TACT Pivotal trial.

General and administrative expenses for the three months ended June 30, 2017 were higher by $814,090 compared to the three months ended June 30, 2016. Professional and consulting fees increased by $520,995, primarily due to legal fees associated with the Company’s Sonalleve MR-HIFU acquisition. Share-based compensation increased by $285,776 due to new options issued to board members and the new executive officer’s options vesting for a full quarter.

Selling and distribution expenses for the three months ended June 30, 2017 were higher by $597,870 compared to the three months ended June 30, 2016. The increase is partially attributable to the provision of $194,594 related to a contractual minimum obligation. In addition, salaries and benefits increased by $95,088 compared to the quarter ended June 30, 2016, resulting from additional direct sales force personnel. Professional and consulting fees, marketing and travel expenses increased by $108,505, $101,920 and $58,828, respectively. These increases relate directly to marketing-related efforts.

Liquidity and Outstanding Share Capital

As of June 30, 2017, the Company had cash of $10,666,467. 

As at August 23, 2017, Profound had an unlimited number of authorized common shares with 63,117,377 common shares issued and outstanding.

Conference Call Details

Profound Medical is pleased to invite all interested parties to participate in a conference call today, August 23, 2017, at 4:30 p.m. ET during which time the results will be discussed.

Live Call:1-888-567-1603 (Canada and the United States)
 1-862-255-5347 (International)
Replay: 1-877-481-4010 (Canada and the United States)
 1-919-882-2331 (International)
Replay ID: 19862

The call will also be broadcast live and archived on the Company's website at under "Investor Presentations" in the Investor Relations section.

About Profound Medical Corp.

The Profound Medical team is committed to creating the powerful combination of real-time MR-guidance as the imaging platform and ultrasound as the energy source for delivering non-invasive ablative tools to clinicians. These key technology pillars, linked with intelligent software and robotics, have the potential to fulfill unmet needs of patients and clinicians in many anatomies and disease states, including prostate cancer, uterine fibroids, and bone metastases. Our mission is to profoundly change the standard of care by creating a tomorrow where clinicians can confidently ablate tissue with precision; a tomorrow where patients have access to safe and effective treatment options, so they can quickly return to their daily lives.

Profound Medical is commercializing a novel technology, TULSA-PRO®, which combines real-time MR imaging with transurethral, robotically-driven therapeutic ultrasound and closed-loop thermal feedback control that is designed to provide precise ablation of the prostate while simultaneously protecting critical surrounding anatomy from potential side effects. TULSA-PRO® is CE marked and Profound Medical is currently conducting a pilot commercial launch of the technology in key European and other CE mark jurisdictions.  The Company is also sponsoring a multicenter, prospective FDA-registered clinical trial, TACT, which, if successful, is expected to support its application to the FDA for approval to market TULSA-PRO® in the United States.

Profound Medical is also commercializing Sonalleve MR-HIFU, an innovative therapeutic platform that combines real-time MR imaging and thermometry with thermal ultrasound to enable precise and incision-free ablation of diseased tissue. Sonalleve is CE marked for the treatment of uterine fibroids and palliative pain treatment of bone metastases. The Company is also in the early stages of exploring additional potential treatment markets for Sonalleve MR-HIFU, such as non-invasive ablation of abdominal cancers and hyperthermia for cancer therapy, where the technology has been shown to have clinical application.

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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange), nor the OTCQX accepts responsibility for the adequacy or accuracy of this release.

Profound Medical Corp.
Interim Condensed Consolidated Balance Sheet (Unaudited)
As at June 30, 2017 and December 31, 2016

 June 30,
  December 31,
Current assets    
Cash     10,666,467  20,833,061 
Trade and other receivables 1,847,394  266,336 
Investment tax credits receivable 397,000  264,000 
Inventory 930,886  416,823 
Prepaid expenses and deposits 744,126  696,909 
  14,585,873  22,477,129 
Property and equipment  1,114,952  953,029 
Intangible assets  244,241  262,685 
  15,945,066  23,692,843 
Current liabilities    
Accounts payable and accrued liabilities 3,217,684  1,771,427 
Customer deposits -  259,293 
Deferred revenue 67,789  - 
Long-term debt 2,791,020  2,877,050 
Provisions 43,109  - 
Other liability 33,721  39,357 
  6,153,323  4,947,127 
Long-term debt 2,475,962  3,760,826 
Provisions 654,277  39,619 
Other liability  37,422  109,044 
  9,320,984  8,856,616 
Shareholders’ Equity    
Share capital 83,352,149  83,272,678 
Contributed surplus 3,500,418  3,000,563 
Accumulated other comprehensive loss   (6,880) 11,316 
Deficit (80,221,605) (71,448,330)
  6,624,082  14,836,227 
  15,945,066  23,692,843 

Profound Medical Corp.
Interim Condensed Consolidated Statement of Loss and Comprehensive Loss (Unaudited)
For the three and six months period ended June 30, 2017 and June 30, 2016
June 30,
June 30,
  Six months
June 30,
  Six months
June 30,
Products 919,845  -  1,472,763  - 
Services 37,294  -  75,893  - 
  957,139  -  1,548,656  - 
Cost of sales 471,359  -  782,584  - 
Gross profit 485,780  -  766,072  - 
Research and development 2,417,972  2,216,096  4,301,101  4,723,695 
General and administrative 1,728,585  914,495  2,846,599  1,849,279 
Selling and distribution 897,153  299,283  2,047,652  459,722 
Total operating expenses 5,043,710  3,429,874  9,195,352  7,032,696 
Finance costs  130,436  254,145  420,136  538,106 
Finance income (32,229) (47,951) (80,794) (98,515)
Net finance costs 98,207  206,194  339,342  439,591 
Loss before income taxes 4,656,137  3,636,068  8,768,622  7,472,287 
Income tax expense 2,356  4,657  4,653  4,657 
Net loss for the period 4,658,493  3,640,725  8,773,275  7,476,944 
Item that may be reclassified to profit or loss        
Foreign currency translation adjustment 15,556  2,267  18,196  5,154 
Net loss and comprehensive loss for the period 4,674,049  3,642,992  8,791,471  7,482,098 
Basic and diluted weighted average shares outstanding   55,372,307  39,473,327  55,329,563  39,473,327 
Basic and diluted net loss per common share 0.08  0.09  0.16  0.19 

Profound Medical Corp.
Interim Condensed Consolidated Cash Flows (Unaudited)
For the three and six months period ended June 30, 2017 and June 30, 2016
  Six months
June 30,
  Six months
June 30,
Cash provided by (used in)    
Operating activities    
Net loss for the period (8,773,275) (7,476,944)
Depreciation of property and equipment 117,790  63,904 
Amortization of intangible assets 25,839  1,250 
Share-based compensation 551,025  366,585 
Interest and accretion expense 525,412  538,038 
Net change in non-cash working capital balances      
Prepaid expenses and deposits (47,217) (694,661)
Accounts payable and accrued liabilities 1,454,745  301,773 
Provisions 657,767  90,907 
Inventory (514,063) - 
Investment tax credits receivable (133,000) (123,100)
Trade and other receivables (1,581,058) (21,490)
Deferred revenue 67,789  - 
Customer deposits (259,293) - 
  (7,907,539) (6,953,738)
Investing activities    
Purchase of intangible assets (34,079) (77,176)
Purchase of property and equipment (279,713) (276,114)
  (313,792) (353,290)
Financing activities    
Payment of long-term debt (1,970,608) (243,350)
Payment of other liability (2,956) - 
Proceeds from share options exercised 28,301  - 
  (1,945,263) (243,350)
Decrease in cash during the period (10,166,594) (7,550,378)
Cash - Beginning of period 20,833,061  10,522,520 
Cash - End of period 10,666,467  2,972,142 


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