Fourth Quarter and Full Year 2023 Financial ResultsTORONTO, March 07, 2024 (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 fourth quarter and full year ended December 31, 2023. 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.
Business Highlights
-- Q4-2023 recurring revenue growth of 60% over Q4-2022. -- TULSA-PRO(R) systems installed base now totals 50; Profound continues to expect to grow that to 75 TULSA-PRO(R) systems in 2024. -- To date, TULSA-PRO(R) has been installed at, or contracted with, 10 of the top 20 cancer hospitals in the United States as ranked by U.S. News and World Report. -- Profound continued to see a wide variety of prostate disease patients treated by its TULSA-PRO(R) customers in Q4-2023: -- Approximately 67% were treated for prostate cancer, 23% were hybrid patients suffering from both prostate cancer and benign prostatic hyperplasia ("BPH"), 7% were salvage, and 3% were men with BPH only; -- For cancer grade, approximately 13% were GG1, 55% were GG2, 22% were GG3, and 10% were GG4 & GG5; -- In terms of ablation, approximately 53% were whole gland; 23% were sub-total but more than half the gland; 24% were focal therapy; and -- For prostate size, approximately 3% were < 20cc; 39% were 20 -- 40cc; 32% were 40-60cc; 21% were 60-100cc; and 5% were over 100cc. -- The ongoing Level 1 CAPTAIN trial comparing the TULSA procedure to radical prostatectomy in men with localized prostate cancer remains on track to complete patient enrollment by the end of this year. -- Last week, Profound announced it had entered into non-exclusive collaboration with Siemens Healthineers designed to further expand physician and patient access to the TULSA procedure. -- Today, the Company announces the promotion of Mathieu Burtnyk, PhD, from SVP Product Leader to Chief Operating Officer. "Our preparations continue for the permanent CPT(R) Category 1 codes for TULSA going into effect at the beginning of 2025, an anticipated inflection point for our business," said Arun Menawat, Profound's CEO and Chairman. "In addition, our next AI based module, called Contouring Assistant, that enables creation of suggested treatment design based upon the specific prostate anatomy of each patient, is now under U.S. Food and Drug Administration review. Based upon user feedback, we believe this upgrade will not only further increase urologists' confidence in treating more of their patients with TULSA, but it is also expected to reduce total TULSA procedure times."
Summary Fourth Quarter 2023 Results
For the quarter ended December 31, 2023, the Company recorded revenue of approximately $2.0 million, with the full amount coming from recurring revenue, which consists of the sale of TULSA-PRO(R) consumables, lease of medical devices, procedures and services associated with extended warranties. Fourth quarter 2023 revenue increased 60% from approximately $1.3 million in the same three-month period a year ago.
Total operating expenses, which consist of research and development ("R&D"), general and administrative ("G&A"), and selling and distribution ("S&D") expenses, were approximately $9.8 million in the fourth quarter of 2023, an increase of 5% compared with approximately $9.4 million in the fourth quarter of 2022, which included the Company's recognition of a non-cash impairment of approximately $2.5 million in the period.
Expenditures for R&D for the three months ended December 31, 2023 were approximately $4.0 million, an increase of 28% compared with approximately $3.1 million in the three months ended December 31, 2022, primarily driven by improved enrollment for the CAPTAIN trial and recruitment efforts, additional consultants hired to assist with the clinical and regulatory affairs of the business, additional travel associated with system installation and testing, increased salaries and personnel during the period and increased software costs associated with thermal boost and artificial intelligence development. These were offset partially by a decrease to material costs.
G&A expenses for the 2023 fourth quarter increased by 41% to approximately $3.0 million, compared with approximately $2.1 million in the same period in 2022. Salaries and benefits, consulting fees, rent expense and expected credit loss allowance increased due to higher cost of living salary increases and bonuses awarded to management, increased legal and accounting fees associated with the establishment of the Company's at-the-market equity program, and lower refund for utility and tax overpayment. Partially offsetting this was a decrease to share-based compensation due to fewer options awarded to employees.
Fourth quarter 2023 S&D expenses increased by 74% to approximately $2.9 million, compared with $1.7 million in the fourth quarter of 2022. This was driven by increased salaries and benefits, consulting fees, share-based compensation and marketing, due to increased salesforce and commission payments, reimbursement and foreign consultants engaged to assist with sales efforts, additional awards granted for employees and increased in-person conferences, customer meetings, release of patient videos and marketing materials. These were partially offset by a decrease in other expenses due to the reduced mobile MRI time as part of the Company's U.S. sales initiative and lower general expenditures.
Net finance costs for the three months ended December 31, 2023 were approximately $356,000, compared with approximately $499,000 in the three months ended December 31, 2022.
Fourth quarter 2023 net loss was approximately $8.9 million, or $0.42 per common share, compared to approximately $9.5 million, or $0.46 per common share, in the three months ended December 31, 2022.
Summary Full Year 2023 Results
For the year ended December 31, 2023, the Company recorded revenue of approximately $7.2 million, with $6.8 million from recurring revenue and $393,000 from the one-time sale of capital equipment in international markets. This compares to revenue of approximately $6.7 million in the twelve months ended December 31, 2022, with $4.7 million from recurring revenue and $2.0 million from the one-time sale of capital equipment.
Profound's full year 2023 total operating expenses were approximately $33.0 million, a 6% decrease compared to approximately $35.1 million in 2022.
Expenditures for R&D for the 12 months ended December 31, 2023 were approximately $14.4 million, a decrease of 2% compared with approximately $14.7 million in 2022. This was primarily driven by decreases in salaries and benefits, share-based compensation, and office supplies. Partially offsetting these was an increase in clinical trial costs, materials, consulting fees, rent and other expenditures.
G&A expenses for the year ended December 31, 2023 decreased 3% to approximately $9.2 million from $9.5 million for the year ended December 31, 2022. This was due to a decrease in salaries and benefits, share-based compensation, software cost and other expense, offset partially by an increase in consulting fees, insurance costs and expected credit loss allowance.
Full year 2023 S&D expenses were approximately $9.5 million, an increase of 12% from $8.5 million in 2022. Increases in salaries and benefits, consulting fees, marketing, travel and other expenses were partially offset by a decrease in share-based compensation due to fewer options awarded to employees.
Net finance expense for the year ended December 31, 2023 was approximately $81,000, which compared to net finance income of approximately $3.7 million in 2022, which was primarily due to a foreign exchange in the year.
The Company recorded a net loss for the year ended December 31, 2023 of approximately $28.6 million, or $1.35 per common share, compared to approximately $28.7 million, or $1.38 per common share, for the year ended December 31, 2023.
Liquidity and Outstanding Share Capital
As at December 31, 2023, Profound had cash of approximately $26.2 million. Subsequent to year end, the Company completed a public offering and a private placement of common shares, resulting it in having approximate cash of $45.4 million as at January 31, 2024.
As at March 7, 2024, Profound had 24,428,899 common shares issued and outstanding.
For complete financial results, please see Profound's filings at www.sedarplus.com, www.sec.gov and on the Company's website at www.profoundmedical.com under "Financial" in the Investors section. A hard copy of the Company's annual report can also be requested free of charge at the bottom of the Investors section of its website.