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 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 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,
2017
$
    December 31,
2016
$
 
         
Assets        
         
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  
         
Liabilities        
         
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
 
    Three
months
ended
June 30,
2017
$
    Three
months
ended
June 30,
2016
$
    Six months
ended
June 30,
2017
$
    Six months
ended
June 30,
2016
$
 
                 
Revenue                
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      
                 
Expenses                
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
ended
June 30,
2017
$
    Six months
ended
June 30,
2016
$
 
         
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  
         
CONTACT: Contacts

For further information, please contact:

Stephen Kilmer
Investor Relations
[email protected]
T: 647.872.4849

Or

Rashed Dewan
Vice President, Finance
T: 647.476.1350