Profound Medical Announces Second Quarter 2022 Financial Results
TORONTO, Aug. 04, 2022 (GLOBE NEWSWIRE) -- Profound Medical Corp. (NASDAQ:PROF; TSX:PRN) (“Profound” or the “Company”), a commercial-stage medical device company that develops and markets customizable, incision-free therapies for the ablation of diseased tissue, today reported financial results for the second quarter ended June 30, 2022. Unless specified otherwise, all amounts in this press release are expressed in U.S. dollars and are presented in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.
Second Quarter 2022 and Recent Corporate Highlights
Multiple clinical presentations and product demonstrations performed at the American Urological Association's (“AUA”) 2022 Annual Meeting, which took place from May 13 – 16 in New Orleans, highlighted the ability of TULSA-PRO® to effectively and safely ablate physician-prescribed prostate tissue in an unrivaled variety of patients with localized prostate cancer and large volume benign prostatic hyperplasia (“BPH”). Of particular note, Kenneth A. Goldberg, M.D., an Assistant Professor in the Department of Urology at UT Southwestern Medical Center, performed a semi-live TULSA procedure during the afternoon Plenary Session on May 13, 2022. The AUA designated this activity for AMA PRA Category 1 Credits™.
Profound held its 2022 Annual General Meeting of Shareholders, at which the Company's shareholders elected all seven nominees to its board of directors.
The Company confirmed that Brian Ellacott, its Independent Lead Director, and Arun Menawat, its CEO and Chairman, had purchased additional Profound stock on Nasdaq at a combined cost of approximately $763,000.
On July 15, 2022, Transurethral Ultrasound Ablation (“TULSA”), performed with Profound’s TULSA-PRO® system, was included in the Proposed Agenda for the American Medical Association’s September 2022 CPT® Editorial Panel Meeting.
“We continue to be encouraged by the growing interest shown in our unique ablative technologies, which has culminated in increased adoption of TULSA-PRO® and the first-ever North American sales of Sonalleve® systems, which were placed at two prestigious, globally recognized institutions – Washington’s National Children’s Hospital and Toronto’s Hospital for Sick Children,” said Dr. Menawat.
Summary Second Quarter 2022 Results
For the quarter ended June 30, 2022, the Company recorded revenue of approximately $2.0 million, with $1.16 million from recurring revenue, which consists of the sale of TULSA-PRO® consumables, lease of medical devices, procedures and services associated with extended warranties, and $864,000 from the one-time sale of capital equipment. This represented revenue growth of 48% sequentially over the 2022 first quarter, driven primarily by the first-time sales of Sonalleve® systems in the United States and Canada, and a revenue decrease from $2.6 million in the same three-month period a year ago, due primarily to lower one-time sales of capital equipment in international markets.
Total operating expenses, which consist of research and development (“R&D”), general and administrative (“G&A”), and selling and distribution expenses, were approximately $8.7 million in the second quarter of 2022, an increase of 15% compared with approximately $7.6 million in the second quarter of 2021.
Expenditures for R&D for the three months ended June 30, 2022 were approximately $3.7 million, an increase of 8% compared with approximately $3.4 million in the three months ended June 30, 2021, primarily driven by CAPTAIN trial enrolment and treatment of patients, an increase in consultants hired for regulatory and engineering projects, traveling for off-site MRI testing and site installation, and additional headcount. These were offset partially by a decrease to material expenses due to verification and validation testing and completion of the GE Healthcare MRI scanner compatibility project and a decrease in share-based compensation.
G&A expenses for the 2022 second quarter increased by 7% to approximately $2.6 million, compared with approximately $2.5 million in the same period in 2021, due to additional headcount and new license costs for enterprise resource planning (ERP) and customer relationship management (CRM) software. Partially offsetting these amounts was a decrease in share-based compensation.
Second quarter 2022 selling and distribution expenses increased by 39% to approximately $2.4 million, compared with $1.7 million in the second quarter of 2021. While selling and distribution expenses have historically been lower than R&D expenses, Profound continues to expect that, in the future, selling and distribution expenses will exceed R&D expenses as the Company continues to commercialize the TULSA-PRO® system in the United States.
Primarily due to a higher foreign exchange gain, net finance income for the three months ended June 30, 2022 was approximately $1.9 million, compared with net finance costs of approximately $602,000 in the three months ended June 30, 2021.
Second quarter 2022 net loss was approximately $5.9 million, or $0.28 per common share, compared to approximately $7.0 million, or $0.35 per common share, in the three months ended June 30, 2021.
Liquidity and Outstanding Share Capital
As at June 30, 2021, Profound had cash of approximately $53.2 million.
As at August 4, 2022, Profound had 20,851,327 common shares issued and outstanding.
For complete financial results, please see Profound’s filings at www.sedar.com, www.sec.gov and on the Company’s website at www.profoundmedical.com under “Financial” in the Investors section.
Conference Call Details
Profound Medical is pleased to invite all interested parties to participate in a conference call today, August 4, 2022, at 4:30 pm ET during which time the results will be discussed.
Live Call Toll-Free: | 1-866-374-5140 (PIN: 23122874#) |
Live Call International: | 1-404-400-0571 (PIN: 23122874#) |
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 is a commercial-stage medical device company that develops and markets customizable, incision-free therapies for the ablation of diseased tissue.
Profound is commercializing TULSA-PRO®, a 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® has the potential 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, Health Canada approved, and 510(k) cleared by the U.S. Food and Drug Administration (“FDA”).
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 and has FDA approval under a Humanitarian Device Exemption for the treatment of osteoid osteoma. 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, BPH, uterine fibroids, palliative pain treatment and osteoid osteoma. 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 medical device industry, regulatory approvals, reimbursement, 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. In addition, there is uncertainty about the spread of the COVID-19 virus and the impact it will have on Profound’s operations, the demand for its products, global supply chains and economic activity in general. 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
| June 30, |
|
| December 31, |
|
|
|
|
| ||
Assets |
|
|
| ||
|
|
|
| ||
Current assets |
|
|
| ||
Cash | 53,235 |
|
| 67,152 |
|
Trade and other receivables | 3,463 |
|
| 1,412 |
|
Inventory | 7,992 |
|
| 7,413 |
|
Prepaid expenses and deposits | 504 |
|
| 1,148 |
|
Total current assets | 65,194 |
|
| 77,125 |
|
|
|
|
| ||
Trade and other receivables | 2,531 |
|
| 3,622 |
|
Property and equipment | 787 |
|
| 788 |
|
Intangible assets | 889 |
|
| 1,435 |
|
Right-of-use assets | 978 |
|
| 1,116 |
|
Goodwill | 2,646 |
|
| 2,689 |
|
|
|
|
| ||
Total assets | 73,025 |
|
| 86,775 |
|
|
|
|
| ||
Liabilities |
|
|
| ||
|
|
|
| ||
Current liabilities |
|
|
| ||
Accounts payable and accrued liabilities | 2,423 |
|
| 3,180 |
|
Deferred revenue | 505 |
|
| 477 |
|
Provisions | 72 |
|
| 87 |
|
Derivative financial instrument | 72 |
|
| 161 |
|
Lease liabilities | 247 |
|
| 250 |
|
Total current liabilities | 3,319 |
|
| 4,155 |
|
|
|
|
| ||
Deferred revenue | 840 |
|
| 875 |
|
Lease liabilities | 985 |
|
| 1,127 |
|
|
|
|
| ||
Total liabilities | 5,144 |
|
| 6,157 |
|
|
|
|
| ||
Shareholders’ Equity |
|
|
| ||
|
|
|
| ||
Share capital | 216,045 |
|
| 219,579 |
|
Contributed surplus | 18,040 |
|
| 16,986 |
|
Accumulated other comprehensive income | 8,634 |
|
| 4,746 |
|
Deficit | (174,838 | ) |
| (160,693 | ) |
|
|
|
| ||
Total Shareholders’ Equity | 67,881 |
|
| 80,618 |
|
|
|
|
| ||
Total Liabilities and Shareholders’ Equity | 73,025 |
|
| 86,775 |
|
| Three |
|
| Three |
| Six months |
|
| Six months |
|
|
|
|
|
|
|
| ||
Revenue |
|
|
|
|
|
|
| ||
Capital equipment | 864 |
|
| 1,459 |
| 1,204 |
|
| 1,693 |
Recurring - non-capital | 1,161 |
|
| 1,168 |
| 2,185 |
|
| 1,645 |
| 2,025 |
|
| 2,627 |
| 3,389 |
|
| 3,338 |
Cost of sales | 1,089 |
|
| 1,411 |
| 2,017 |
|
| 1,870 |
Gross profit | 936 |
|
| 1,216 |
| 1,372 |
|
| 1,468 |
|
|
|
|
|
|
|
| ||
Operating expenses |
|
|
|
|
|
|
| ||
Research and development | 3,688 |
|
| 3,419 |
| 6,868 |
|
| 6,524 |
General and administrative | 2,632 |
|
| 2,453 |
| 4,978 |
|
| 4,585 |
Selling and distribution | 2,394 |
|
| 1,728 |
| 4,596 |
|
| 3,315 |
Total operating expenses | 8,714 |
|
| 7,600 |
| 16,442 |
|
| 14,424 |
|
|
|
|
|
|
|
| ||
Operating Loss | 7,778 |
|
| 6,384 |
| 15,070 |
|
| 12,956 |
|
|
|
|
|
|
|
| ||
Net finance costs/(income) | (1,864 | ) |
| 602 |
| (972 | ) |
| 1,502 |
|
|
|
|
|
|
|
| ||
Loss before taxes | 5,914 |
|
| 6,986 |
| 14,098 |
|
| 14,458 |
|
|
|
|
|
|
|
| ||
Income taxes | 16 |
|
| 57 |
| 47 |
|
| 84 |
|
|
|
|
|
|
|
| ||
Net loss attributed to shareholders for the period | 5,930 |
|
| 7,043 |
| 14,145 |
|
| 14,542 |
|
|
|
|
|
|
|
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Other comprehensive loss |
|
|
|
|
|
|
| ||
Item that may be reclassified to loss |
|
|
|
|
|
|
| ||
Foreign currency translation adjustment- net of tax | (6,181 | ) |
| 1,929 |
| (3,888 | ) |
| 2,914 |
Net loss and comprehensive loss/(income) for the period | (251 | ) |
| 8,972 |
| 10,257 |
|
| 17,456 |
|
|
|
|
|
|
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| ||
Loss per share |
|
|
|
|
|
|
| ||
Basic and diluted loss per common share | 0.28 |
|
| 0.35 |
| 0.68 |
|
| 0.72 |
| Six months ended |
| Six months ended |
|
|
|
| ||
Operating activities |
|
| ||
Net loss for the period | (14,145 | ) | (14,542 | ) |
Adjustments to reconcile net loss to net cash flows from operating activities: |
|
| ||
Depreciation of property and equipment | 327 |
| 229 |
|
Amortization of intangible assets | 531 |
| 502 |
|
Depreciation of right-of-use assets | 118 |
| 165 |
|
Share-based compensation | 2,466 |
| 2,798 |
|
Interest and accretion expense | 32 |
| 46 |
|
Deferred revenue | 11 |
| 107 |
|
Change in fair value of derivative financial instrument | (89 | ) | (149 | ) |
Interest income on trade and other receivables | (212 | ) | - |
|
Changes in non-cash working capital balances |
|
| ||
Trade and other receivables | (823 | ) | 56 |
|
Prepaid expenses and deposits | 636 |
| 640 |
|
Inventory | (1,012 | ) | (2,135 | ) |
Accounts payable and accrued liabilities | (724 | ) | (1,168 | ) |
Provisions | (15 | ) | (12 | ) |
Income taxes payable | - |
| (13 | ) |
Foreign exchange on cash | (528 | ) | 1,188 |
|
Net cash flow used in operating activities | (13,427 | ) | (12,288 | ) |
|
|
| ||
Investing activities |
|
| ||
Purchase of property and equipment | - |
| (32 | ) |
Purchase of intangible assets | - |
| (313 | ) |
Total cash used in investing activities | - |
| (345 | ) |
|
|
| ||
Financing activities |
|
| ||
Payment of other liabilities | - |
| (99 | ) |
Proceeds from share options exercised | 95 |
| 342 |
|
Proceeds from warrants exercised | - |
| 1,511 |
|
Payment of lease liabilities | (161 | ) | (197 | ) |
Total cash from financing activities | (66 | ) | 1,557 |
|
|
|
| ||
Net change in cash during the period | (13,493 | ) | (11,076 | ) |
Foreign exchange on cash | (424 | ) | 934 |
|
Cash – Beginning of period | 67,152 |
| 83,913 |
|
Cash – End of period | 53,235 |
| 73,771 |
|
