Theralase Increases Revenue 22% for 2017 Financial Statements

Toronto, Ontario (FSCwire) - (“Theralase®” or the “Company”) (TSXV: TLT) (OTCQX: TLTFF), a clinical stage pharmaceutical company dedicated to the research and development of light activated Photo Dynamic Compounds (“PDCs”) and their associated drug formulations to safely and effectively destroy various cancers, announced today that for the year ended December 31, 2017, total revenue increased to $2,342,508 from $1,918,893 in 2016, a 22% increase. 

In Canada, revenue increased 36% to $1,942,010 from $1,423,181. In the US, revenue decreased 37% to $261,833 from $416,812 while, international revenue increased 76% to $138,665 from $78,900. The increase in Canadian and international revenue in 2017 and the corresponding decrease in US revenue is attributable to the Company’s sales and marketing team focusing on the Canadian and international markets.

Cost of sales for the year ended December 31, 2017 was $945,010 (40% of revenue) resulting in a gross margin of $1,397,498 or 60% of revenue, compared to a cost of sales of $796,569 (42% of revenue) in 2016, resulting in a gross margin of $1,122,324 or 58% of revenue. Cost of sales is represented by the following costs: raw materials, subcontracting, direct and indirect labour and the applicable share of manufacturing overhead.

The cost of sales slight decrease, year over year, is attributed to increasing revenues, while fixed costs remain constant and variable costs increased as a direct proportion to products sold.

For the year ended December 31, 2017, selling and marketing expenses increased to $1,917,106 or 82% of sales, from $1,614,678 or 84% of sales in 2016, a 19% increase.

The increase is primarily due to increased investment in sales and marketing personnel. Selling expenses are expected to increase in future quarters as the Company expands in Canada, the US and international markets. Due to increased revenues, selling and marketing expense reduced 2% year over year as a percentage of sales.

Administrative expenses for the year ended December 31, 2017 were $2,912,170 representing a 14% increase from $2,546,706 in 2016.

Increases in administrative expenses are attributed to the following:

• Insurance expenses increased 27% due to increased product liability coverage

• Professional fees increased 120%, as a result of increased securities and patent legal costs

• Rent increased by 16%, as a result of relocation from a 4,900 square foot facility to a 9,200 square foot facility.

Net research and development expenses for the year ended December 31, 2016 increased to $2,652,969 from $1,867,621 in 2016, a 42% increase.

Research and development expenses increased primarily due to expenses for conducting the Phase Ib NMIBC clinical study. Research and development expenses represented 35% of the Company’s operating expenses for the year ended December 31, 2017 and represent investment into the research and development of the Company’s anti-cancer technology.

The net loss for the year ended December 31, 2017 was $6,093,596 which included $762,101 of net non-cash expenses (i.e.: amortization, stock-based compensation expense, foreign exchange gain/loss and lease inducements). This compared to a net loss for the same period in 2016 of $4,921,248, which included $613,521 of net non-cash expenses. The PDT division represented $2,994,590 of this loss (49%) in 2017.

The increase in net loss is primarily due to three reasons:

1)  Increased investment in research and development in the Phase Ib NMIBC clinical study.

2)  Increased investment in external engineering resources to redesign the software, firmware and hardware of the TLC-2000 therapeutic laser.

3)  Increased sales, marketing and administrative costs, related to increasing sales of the TLC-2000 therapeutic laser system.

Theralase is focused on completing a Phase Ib clinical trial for high-risk, Bacillus Calmette-Guerin (“BCG”) unresponsive patients diagnosed with NMIBC, using Photo Dynamic Therapy (“PDT”) which involves a light-activated, anti-cancer drug, TLD-1433.

The Company commenced a “first-in-man” Phase Ib NMIBC clinical trial using its PDT technology aimed at evaluating the safety and tolerability as a primary outcome measure, PharmacoKinetics (“PK”) (where the PDC accumulates in the body and how it exits the body), as a secondary outcome measure and efficacy, as an exploratory outcome measure, in the treatment of NMIBC.

In the first part of the study, three patients were enrolled and treated with PDT (TLC-3200 / TLC-3400 DFOC System) at the MSRD of TLD-1433. Treatment at the MSRD did not raise significant safety concerns, as determined by the independent Data Safety Monitoring Board (“DSMB”) therefore approval was given to treat up to an additional six patients at the Therapeutic Dose.  Under the approval an additional three patients were enrolled and treated with PDT at the Therapeutic Dose of TLD-1433 and three additional patients remain to be enrolled and treated at the Therapeutic Dose.   

As previously reported:

• the first three patients treated at the MRSD successfully achieved the primary, secondary and exploratory outcome measures at 90 days post treatment.

• Patient four treated at the Therapeutic Dose successfully achieved the primary, secondary and exploratory outcome measures at 90 days post treatment. During the 90 day cystoscopy analysis, patient number four’s bladder surface wall was observed to be red and inflamed. At 138 days, the patient underwent a Trans-Urethral Resection of the Bladder Tumour (“TURBT”) procedure and although there was no progressive disease in the bladder, was found to have developed metastatic urothelial carcinoma.

• Patient five treated at the Therapeutic Dose successfully achieved the primary, secondary and exploratory outcome measures at 90 days post treatment. At the 90 day cystoscopic assessment, completed in April 2018, no tumour recurrence or presence of disease was detected.

• Patient six was treated at the Therapeutic Dose and the patient’s 90-day cystoscopy analysis will be completed in May 2018. The patient has demonstrated no clinical evidence or presence of disease.

Conclusions:

Light activated TLD-1433 PDC, based on the first six (6) patients treated, has preliminarily shown:

1)  A high level of safety and tolerability based on clinical and histomorphology evaluations and PK analysis, in patients with high risk, unresponsive, NMIBC, for 180 days post PDT treatment, when treated at the MRSD;

2)  A high level of safety and tolerability based on clinical and histomorphology evaluations and PK analysis, in patients with high risk, unresponsive, NMIBC, for 90 days post PDT treatment, when treated at the Therapeutic Dose;

3)  An ability to delay progression of NMIBC for 180 days post treatment when treated at the MSRD;

4)  A delay in recurrence and progression of NMIBC for 90 days post treatment at the Therapeutic Dose.

5)  The last two patients, who received the Therapeutic Dose with a modified treatment procedure, are considered clinically cancer free, as of last clinical assessment.

If safety and tolerability of the PDT procedure is demonstrated, the Phase Ib NMIBC study results will be used to seek Health Canada approval for a Phase II multi-center efficacy study for NMIBC in Canada, the United States and internationally.

About Theralase Technologies Inc.

Theralase® is a clinical stage pharmaceutical company dedicated to the research and development of light activated Photo Dynamic Compounds and their associated drug formulations to safely and effectively destroy various cancers.  The Company in its Cool Laser Division designs, manufactures and distributes patented and proprietary super-pulsed cool laser technology for the treatment of knee pain, and in off-label use, the treatment of numerous nerve, muscle and joint conditions.

Additional information is available at www.theralase.com and www.sedar.com.

This news release contains "forward-looking statements" which reflect the current expectations of management of the Corporation’s future growth, results of operations, performance and business prospects and opportunities. Such statements include, but are not limited to, statements regarding Theralase’s proposed development plans with respect to Photo Dynamic Compounds and their drug formulations. Wherever possible, words such as "may", "would", "could", “should”, "will", "anticipate", "believe", "plan", "expect", "intend", "estimate", "potential for" and similar expressions have been used to identify these forward-looking statements. These statements reflect management's current beliefs with respect to future events and are based on information currently available to management. Forward-looking statements involve significant risks, uncertainties and assumptions including with respect to the ability of Theralase to: successfully fund and complete the Phase Ib NMIBC clinical study, secure the requisite regulatory approvals to commence and fund a Phase II NMIBC clinical study and implement its development plans. Many factors could cause the Corporation’s actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements; including, without limitation, those listed in the filings made by the Corporation with the Canadian securities regulatory authorities (which may be viewed at www.sedar.com). Should one or more of these risks or uncertainties materialize or should assumptions underlying the forward looking statements prove incorrect, actual results, performance or achievements may vary materially from those expressed or implied by the forward-looking statements contained in this news release. These factors should be considered carefully and prospective investors should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in the press release are based upon what management currently believes to be reasonable assumptions, the Corporation cannot assure prospective investors that actual results, performance or achievements will be consistent with these forward-looking statements. The Corporation disclaims any intention or obligation to revise forward-looking statements whether as a result of new information, future developments or otherwise except as required by law. All forward-looking statements are expressly qualified in their entirety by this cautionary statement.

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

For More Information:

1.866.THE.LASE (843-5273)

416.699.LASE (5273)

info@theralase.com

www.theralase.com

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