TORONTO, Nov. 07, 2017 (GLOBE NEWSWIRE) -- Profound Medical Corp. (TSX-V:PRN) (OTCQX:PRFMF) (“Profound” or the “Company”), the only company to provide a therapeutics platform that provides the precision of real-time Magnetic Resonance (“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 nine months ended September 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 July 31, 2017, Profound completed the Sonalleve® MR-HIFU Transaction, establishing Profound as a market leader in MR-ultrasound ablation therapy.
- On September 20, 2017, Profound completed a bought deal financing pursuant to a short form prospectus (the “2017 Offering”), for total gross proceeds of $10 million. The 2017 Offering was completed through a syndicate of underwriters led by Echelon Wealth Partners Inc. and including CIBC World Markets Inc.
“We became a dramatically different company in the third quarter of 2017,” said Arun Menawat, Profound’s CEO. “With the acquisition of Philips’ Sonalleve® business, Profound began to make the leap from a medical device company focused exclusively on prostate cancer ablation to a platform company, offering incision-free ablative technology to clinicians targeting various unmet needs of patients in many different anatomies and disease states. The transaction also allowed Profound to immediately transition from a development-stage company to one focused on growth. As always, we look forward to updating our stakeholders as we progress.”
Summary Third Quarter 2017 Results
For the quarter ended September 30, 2017, the Company recorded revenues of $1,465,412, with $1,452,773 from the sale of products and $12,639 from installation and training services. The third quarter 2017 revenues compared to $nil in the third quarter of 2016, and reflected a 53% increase sequentially over $957,139 recorded in the previous quarter.
The Company recorded a net loss for the three months ended September 30, 2017 of $5,520,074, or $0.09 per common share, compared with a net loss of $4,061,208, or $0.10 per common share, for the three months ended September 30, 2016. For the three months ended September 30, 2017, the increase in net loss was primarily attributed to an increase in selling and distribution expenses of $429,057, general and administrative expenses of $633,172 and an increase in financing costs of $357,780, partially offset by gross profits of $279,738.
Expenditures for R&D for the three months ended September 30, 2017 were higher by $306,572 compared to the three months ended September 30, 2016. Overall, the increase in R&D spending was attributed to the TACT Pivotal Clinical Trial ongoing activities, increased workforce costs and the inclusion of the Sonalleve® MR-HIFU operations. Clinical trial costs, salaries and benefits, rent and travel increased by $232,446, $389,947, $102,739 and $35,650, respectively, resulting from ongoing activities related to the initiation of clinical sites visits, enrollment initiatives and patient treatment. Amortization of intangible assets increased by $186,847 due to the Sonalleve® Transaction, license agreement costs and software upgrades. Offsetting this amount was a decrease in materials, consulting fees and other expenses by $360,512, $173,805, and 127,533 respectively. These costs were lower compared to the three months ended September 30, 2016, due to lower R&D initiatives and the in-house manufacturing of disposables.
General and administrative expenses for the three months ended September 30, 2017 were higher by $633,172 compared to the three months ended September 30, 2016. Professional and consulting fees increased by $240,720, primarily due to the legal fees associated with the Transaction and the inclusion of Sonalleve® MR-HIFU operations relating to bookkeeping and IT costs. Share-based compensation increased by $277,835 due to due to options vesting to board members and executive officers and depreciation expense increased by $104,248 primarily due to property and equipment for the new facility.
Selling and distribution expenses for the three months ended September 30, 2017 were higher by $429,057 compared to the three months ended September 30, 2016. The increase is attributable to the commission payable provision of $50,798 related to the Siemens Healthcare estimated shortfall of revenue share payments compared to the minimum amounts contractually required. In addition, salaries and benefits increased by $151,382 compared to the three months ended September 30, 2016, resulting from additional direct sales force personnel. Professional and consulting fees, marketing and travel expenses increased by $98,491, $32,028 and $65,743, respectively. These increases relate directly to marketing-related efforts and increased sales force.
Liquidity and Outstanding Share Capital
As of September 30, 2017, the Company had cash of $16,307,428.
As at November 7, 2017, Profound had an unlimited number of authorized common shares with 73,117,377 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, 2017, at 4:30 p.m. ET during which time the results will be discussed.
| Live Call: | 1- 888-567-1602 (Canada and the United States) | |
| 1-404-267-0373 (International) | ||
| Replay: | 1-877-481-4010 (Canada and the United States) | |
| Replay ID: | 21906 |
The call will also be broadcast live and archived on the Company's website at profoundmedical.com 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 palliative pain treatment of 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 Magnetic Resonance 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®, 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®, 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.
For further information, please contact:
Stephen Kilmer
Investor Relations
skilmer@profoundmedical.com
T: 647.872.4849
Or
Rashed Dewan
Vice President, Finance
T: 647.476.1350
Profound Medical Corp.
Interim Condensed Consolidated Balance Sheets
(Unaudited)
| September 30, 2017 $ | December 31, 2016 $ | |||||
| Assets | ||||||
| Current assets | ||||||
| Cash | 16,307,428 | 20,833,061 | ||||
| Trade and other receivables | 2,576,170 | 266,336 | ||||
| Investment tax credits receivable | 180,000 | 264,000 | ||||
| Inventory | 1,062,446 | 416,823 | ||||
| Prepaid expenses and deposits | 641,827 | 696,909 | ||||
| 20,767,871 | 22,477,129 | |||||
| Property and equipment | 1,810,625 | 953,029 | ||||
| Intangible assets | 5,424,108 | 262,685 | ||||
| Goodwill | 3,409,165 | - | ||||
| 31,411,769 | 23,692,843 | |||||
| Liabilities | ||||||
| Current liabilities | ||||||
| Accounts payable and accrued liabilities | 4,712,012 | 1,771,427 | ||||
| Customer deposits | - | 259,293 | ||||
| Deferred revenue | 149,298 | - | ||||
| Long-term debt | 4,920,830 | 2,877,050 | ||||
| Provisions | 42,923 | - | ||||
| Other liabilities | 479,022 | 39,357 | ||||
| 10,304,085 | 4,947,127 | |||||
| Long-term debt | 452,347 | 3,760,826 | ||||
| Provisions | 682,013 | 39,619 | ||||
| Other liabilities | 1,592,463 | 109,044 | ||||
| 13,030,908 | 8,856,616 | |||||
| Shareholders’ Equity | ||||||
| Share capital | 98,386,770 | 83,272,678 | ||||
| Contributed surplus | 5,738,976 | 3,000,563 | ||||
| Accumulated other comprehensive income (loss) | (3,206 | ) | 11,316 | |||
| Deficit | (85,741,679 | ) | (71,448,330 | ) | ||
| 18,380,861 | 14,836,227 | |||||
| 31,411,769 | 23,692,843 | |||||
Profound Medical Corp.
Interim Condensed Consolidated Statements of Loss and Comprehensive Loss
(Unaudited)
| Three months ended September 30, 2017 $ | Three months ended September 30, 2016 $ | Nine months ended September 30, 2017 $ | Nine months ended September 30, 2016 $ | |||||||||
| Revenue | ||||||||||||
| Products | 1,452,773 | - | 2,925,536 | - | ||||||||
| Services | 12,639 | - | 88,532 | - | ||||||||
| 1,465,412 | - | 3,014,068 | - | |||||||||
| Cost of sales | 1,185,674 | - | 1,968,258 | - | ||||||||
| Gross profit | 279,738 | - | 1,045,810 | - | ||||||||
| Expenses | ||||||||||||
| Research and development | 2,812,684 | 2,506,112 | 7,113,785 | 7,229,806 | ||||||||
| General and administrative | 1,631,967 | 998,795 | 4,478,566 | 2,848,075 | ||||||||
| Selling and distribution | 703,783 | 274,726 | 2,751,435 | 734,448 | ||||||||
| Total operating expenses | 5,148,434 | 3,779,633 | 14,343,786 | 10,812,329 | ||||||||
| Finance costs | 659,902 | 302,122 | 1,080,038 | 840,228 | ||||||||
| Finance income | (8,524 | ) | (25,270 | ) | (89,318 | ) | (123,785 | ) | ||||
| Net finance costs | 651,378 | 276,852 | 990,720 | 716,443 | ||||||||
| Loss before income taxes | 5,520,074 | 4,056,485 | 14,288,696 | 11,528,772 | ||||||||
| Income taxes | - | 4,723 | 4,653 | 9,380 | ||||||||
| Net loss for the period | 5,520,074 | 4,061,208 | 14,293,349 | 11,538,152 | ||||||||
| Item that may be reclassified to profit or loss | ||||||||||||
| Foreign currency translation adjustment | (3,674 | ) | 5,341 | 14,522 | 10,495 | |||||||
| Net loss and comprehensive loss for the period | 5,516,400 | 4,066,549 | 14,307,871 | 11,548,647 | ||||||||
| Basic and diluted weighted average shares outstanding | 61,614,117 | 39,482,212 | 57,456,823 | 39,476,278 | ||||||||
| Basic and diluted net loss per common share | (0.09 | ) | (0.10 | ) | (0.25 | ) | (0.29 | ) | ||||
Profound Medical Corp.
Interim Condensed Consolidated Cash Flows
(Unaudited)
| Nine months ended September 30, 2017 $ | Nine months ended September 30, 2016 $ | |||||
| Cash provided by (used in) | ||||||
| Operating activities | ||||||
| Net loss for the period | (14,293,349 | ) | (11,538,152 | ) | ||
| Depreciation of property and equipment | 271,225 | 113,336 | ||||
| Amortization of intangible assets | 218,408 | 7,889 | ||||
| Share-based compensation | 973,336 | 501,035 | ||||
| Interest and accretion expense | 1,135,008 | 840,152 | ||||
| Change in fair value of contingent consideration | 52,342 | - | ||||
| Transaction costs related to business acquisition | 716,767 | - | ||||
| Net change in non-cash working capital balances | ||||||
| Prepaid expenses and deposits | 55,082 | (687,200 | ) | |||
| Accounts payable and accrued liabilities | 2,892,346 | 1,088,126 | ||||
| Provisions | 685,317 | 40,594 | ||||
| Inventory | (645,623 | ) | - | |||
| Investment tax credits receivable | 84,000 | (25,000 | ) | |||
| Trade and other receivables | (2,309,834 | ) | (63,780 | ) | ||
| Deferred revenue | 149,298 | - | ||||
| Customer deposits | (259,293 | ) | - | |||
| (10,274,970 | ) | (9,723,000 | ) | |||
| Investing activities | ||||||
| Transaction costs related to business acquisition | (716,767 | ) | - | |||
| Sale of short-term investment | - | 10,000,000 | ||||
| Purchase of intangible assets | (34,079 | ) | (139,679 | ) | ||
| Purchase of property and equipment | (414,950 | ) | (831,113 | ) | ||
| (1,165,796 | ) | 9,029,208 | ||||
| Financing activities | ||||||
| Payment of long-term debt and interest | (2,429,230 | ) | (265,025 | ) | ||
| Payment of other liabilities | (7,742 | ) | - | |||
| Proceeds from share options exercised | 100,301 | 3,675 | ||||
| Issuance of common shares | 10,000,000 | - | ||||
| Transaction costs paid | (748,196 | ) | - | |||
| 6,915,133 | (261,350 | ) | ||||
| Decrease in cash during the period | (4,525,633 | ) | (955,142 | ) | ||
| Cash - Beginning of period | 20,833,061 | 10,522,520 | ||||
| Cash - End of period | 16,307,428 | 9,567,378 | ||||