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 first
quarter ended March 31, 2024 and provided full-year 2024 revenue
guidance. 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
- The TULSA-PRO®
systems installed base grew from 47 at the end of 2023 to 53 as of
the end of Q1-2024; Profound continues to expect that to grow to 75
TULSA-PRO® systems this year.
- Profound
continued to see a wide variety of prostate disease patients
treated by its TULSA-PRO® customers in the first quarter of 2024:
- Approximately
71% were treated for prostate cancer, 21% were hybrid patients
suffering from both prostate cancer and benign prostatic
hyperplasia (“BPH”), 6% were salvage, and 2% were men with BPH
only;
- For cancer
grade, approximately 15% were GG1, 47% were GG2, 27% were GG3, and
13% were GG4 & GG5;
- In terms of
ablation, approximately 53% were whole gland; 26% were sub-total
but more than half the gland; 10% were hemi-ablations; and 12% were
focal therapy; and
- For prostate
size, approximately 4% were < 20cc; 29% were 20 – 40cc; 40% were
40-60cc; 23% were 60-100cc; and 4% were over 100cc.
- Profound’s next
TULSA AI module, Contouring Assistant, which has been designed to
enable the creation of a suggested treatment design based upon the
specific prostate anatomy of each patient, is currently under U.S.
Food and Drug Administration (FDA) review.
- In or around
late-July 2024, the Company anticipates that the U.S. Centers for
Medicare & Medicaid Services (CMS) will issue its proposed
outpatient prospective payment system (OPPS) reimbursement rule for
the three new CPT® Category 1 codes and their descriptors covering
the TULSA procedure, with the final rule anticipated in November
2024, which will become effective on January 1, 2025.
- 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.
- Earlier this
week, Profound announced that 25 TULSA-related scientific research
presentations have already been delivered at major medical meetings
around the world thus far in 2024.
- Today, the
Company is providing annual revenue guidance for the first
time.
“Concurrent with growing awareness of the TULSA
procedure’s potential to become a mainstream treatment modality for
prostate disease among urologists via our sales, marketing and
clinical education programs, our preparations continue for the
permanent CPT® Category 1 codes for TULSA going into effect at the
beginning of 2025,” said Arun Menawat, Profound’s CEO and Chairman.
“As we continue to advance toward what we anticipate will be a
major inflection point for our business, we believe that we now
have sufficient visibility into the pace of TULSA adoption ahead of
it, both in terms of existing system utilization and installed base
growth, to initiate full-year revenue guidance.”
Summary First Quarter 2024
Results
For the quarter ended March 31, 2024, the
Company recorded revenue of approximately $1.91 million, with $1.48
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 $428,000 for
one-time sale of capital equipment. First quarter 2024 revenue
increased approximately 3% from $1.86 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 $8.8 million in the first quarter of 2024, an
increase of 9% compared with approximately $8.1 million in the
first quarter of 2023.
Expenditures for R&D for the three months
ended March 31, 2024 were approximately $3.9 million, an increase
of 2% compared with approximately $3.8 million in the three months
ended March 31, 2023, primarily driven by improved enrollment for
the CAPTAIN trial and recruitment efforts, additional travel
associated with system installation and clinical trials, and
increased software costs associated with thermal boost and
artificial intelligence development software. Partially offsetting
these amounts was a decrease in rent due to lower MRI time usage
and a decrease in share-based compensation due to fewer awards
granted to employees.
G&A expenses for the 2024 first quarter
increased by 13% to approximately $2.4 million, compared with
approximately $2.1 million in the same period in 2023. Salaries and
benefits, consulting fees and travel increased due to higher cost
of living salary increases, increased legal and accounting fees,
and increased travel for investor relations and conferences.
Partially offsetting this was a decrease to insurance expense due
to lower premium rates and a decrease to general office
expenses.
First quarter 2024 S&D expenses increased by
15% to approximately $2.4 million, compared with $2.1 million in
the first quarter of 2023. This was driven by increases in salaries
and benefits, consulting fees, and marketing and travel expenses
due to increased salesforce and commission payments, consultants
engaged to assist with Veteran Affairs and military sales markets,
release of commercial segments and marketing advertisement
campaigns, and increased in-person conferences and customer
meetings. These were partially offset by a decrease in share-based
compensation due to fewer awards granted to employees.
Net finance income for the three months ended
March 31, 2024 was approximately $1.3 million, compared with
approximately $145,000 in the three months ended March 31,
2023.
First quarter 2024 net loss was approximately
$6.2 million, or $0.26 per common share, compared to approximately
$6.7 million, or $0.32 per common share, in the three months ended
March 31, 2023.
2024 Financial Outlook
Based on the Company’s current business planning
and budgeting activities, it expects total revenue for full-year
2024 to be in the range of $11.0 million to $12.0 million, which
represents 53% to 67% growth compared to its prior year
revenue.
Liquidity and Outstanding Share
Capital
As at March 31, 2024, Profound had cash of
approximately $41.2 million.
As at May 9, 2024, Profound had 24,428,899
common shares issued and outstanding.
For complete financial results, please see
Profound’s filings at www.sedarplus.ca, 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 at
4:30 pm ET during which time the results will be discussed.
To participate in the conference call by telephone, please
pre-register via this link to receive the dial-in number and your
unique PIN.
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, any express or implied statements or guidance regarding
current or future financial performance and position, including the
Company’s year 2024 financial guidance and related assumptions; the
expectations regarding the efficacy of Profound’s technology in the
treatment of prostate cancer, BPH, uterine fibroids, palliative
pain treatment and osteoid osteoma; and its future
revenues/financial results. 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, statements and projections regarding
financial guidance and goals and the attainment of such goals may
differ from actual results based on market factors and Profound’s
ability to execute its operational and budget plans; and actual
financial results may not be consistent with expectations,
including that revenue, operating expenses and cash usage may not
be within management's expected ranges. For additional risks,
please see the Company’s annual information form for the year ended
December 31, 2023 and other disclosure documents available on
www.sedarplus.ca and www.sec.gov. 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.
Financial Outlook
This press release contains a financial outlook
within the meaning of applicable securities laws. The financial
outlook has been prepared by management of the Company to provide
an outlook for the Company’s forecasted revenue for the 12 months
to be ended December 31, 2024 and may not be appropriate for any
other purpose. The financial outlook has been prepared based on a
number of assumptions including the assumptions discussed under the
heading “Forward-Looking Statements” herein. The actual results of
the Company’s operations for any period may vary from the amounts
set forth in these projections and such variations may be material.
The Company and its management believe that the financial outlook
has been prepared on a reasonable basis. However, because this
information is highly subjective and subject to numerous risks,
including the risks discussed under the heading “Forward-Looking
Statements” herein, it should not be relied on as necessarily
indicative of future results.
For further information, please
contact:
Stephen KilmerInvestor
Relationsskilmer@profoundmedical.com T: 647.872.4849
Profound Medical Corp.Interim
Condensed Consolidated Balance Sheets(Unaudited)
|
|
March
31,2024$ |
|
December
31,2023$ |
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
Current assets |
|
|
|
Cash |
|
41,180 |
|
26,213 |
|
Trade and other receivables |
|
6,510 |
|
7,288 |
|
Inventory |
|
6,976 |
|
6,989 |
|
Prepaid expenses and deposits |
|
875 |
|
1,406 |
|
Total current assets |
|
55,541 |
|
41,896 |
|
|
|
|
|
Property and equipment |
|
866 |
|
909 |
|
Intangible assets |
|
428 |
|
490 |
|
Right-of-use assets |
|
547 |
|
616 |
|
|
|
|
|
Total assets |
|
57,382 |
|
43,911 |
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
Accounts payable and accrued liabilities |
|
2,875 |
|
3,282 |
|
Deferred revenue |
|
644 |
|
721 |
|
Long-term debt |
|
6,482 |
|
2,104 |
|
Lease liabilities |
|
253 |
|
259 |
|
Income taxes payable |
|
13 |
|
- |
|
Total current liabilities |
|
10,267 |
|
6,366 |
|
|
|
|
|
Deferred tax liability |
|
59 |
|
59 |
|
Long-term debt |
|
- |
|
5,000 |
|
Deferred revenue |
|
697 |
|
728 |
|
Lease liabilities |
|
501 |
|
578 |
|
|
|
|
|
Total liabilities |
|
11,524 |
|
12,731 |
|
|
|
|
|
Shareholders’ Equity |
|
|
|
|
|
|
|
Share capital |
|
232,763 |
|
217,393 |
|
Contributed surplus |
|
19,985 |
|
19,687 |
|
Accumulated other comprehensive income |
|
17,240 |
|
12,031 |
|
Deficit |
|
(224,130 |
) |
(217,931 |
) |
|
|
|
|
Total Shareholders’ Equity |
|
45,858 |
|
31,180 |
|
|
|
|
|
Total Liabilities and Shareholders’ Equity |
|
57,382 |
|
43,911 |
|
Profound Medical Corp.Interim
Condensed Consolidated Statements of Loss and Comprehensive
Loss(Unaudited)
|
|
Three months ended March 31,
2024$ |
|
Three months ended March 31,
2023$ |
|
|
|
|
|
Revenue |
|
|
|
Recurring - non-capital |
|
1,482 |
|
1,467 |
|
Capital equipment |
|
428 |
|
393 |
|
|
|
1,910 |
|
1,860 |
|
Cost of sales |
|
641 |
|
647 |
|
Gross profit |
|
1,269 |
|
1,213 |
|
|
|
|
|
Operating expenses |
|
|
|
Research and development |
|
3,933 |
|
3,840 |
|
General and administrative |
|
2,387 |
|
2,106 |
|
Selling and distribution |
|
2,431 |
|
2,105 |
|
Total operating expenses |
|
8,751 |
|
8,051 |
|
|
|
|
|
Operating loss |
|
7,482 |
|
6,838 |
|
|
|
|
|
Net finance expense (income) |
|
(1,322 |
) |
(145 |
) |
|
|
|
|
Loss before income taxes |
|
6,160 |
|
6,693 |
|
|
|
|
|
Income tax expense |
|
39 |
|
48 |
|
|
|
|
|
Net loss attributed to shareholders for the
period |
|
6,199 |
|
6,741 |
|
|
|
|
|
Other comprehensive (income) loss |
|
|
|
Item that may be reclassified to loss |
|
|
|
Foreign currency translation adjustment - net of tax |
|
(5,209 |
) |
47 |
|
|
|
|
|
Net loss and comprehensive loss for the
period |
|
990 |
|
6,788 |
|
|
|
|
|
Loss per share |
|
|
|
Basic and diluted loss per common share |
|
0.26 |
|
0.32 |
|
Profound Medical Corp.Interim
Condensed Consolidated Statements of Cash
Flows(Unaudited)
|
Three months ended March 31,
2024$ |
|
Three months ended March 31,
2023$ |
|
|
|
|
Operating activities |
|
|
Net loss for the period |
(6,199 |
) |
(6,741 |
) |
Adjustments to reconcile net loss to net cash flows from operating
activities: |
|
|
Depreciation of property and equipment |
199 |
|
179 |
|
Amortization of intangible assets |
51 |
|
50 |
|
Depreciation of right-of-use assets |
55 |
|
54 |
|
Share-based compensation |
767 |
|
941 |
|
Interest and accretion expense |
177 |
|
192 |
|
Deferred revenue |
(107 |
) |
212 |
|
Change in fair value of derivative financial instrument |
- |
|
(121 |
) |
Net change in amortized cost of trade and other receivables |
(69 |
) |
(39 |
) |
Changes in non-cash working capital balances |
|
|
Trade and other receivables |
854 |
|
(600 |
) |
Prepaid expenses and deposits |
553 |
|
364 |
|
Inventory |
(180 |
) |
(330 |
) |
Accounts payable and accrued liabilities |
(570 |
) |
(21 |
) |
Provisions |
- |
|
6 |
|
Income taxes payable |
13 |
|
48 |
|
Foreign exchange on cash |
(642 |
) |
(17 |
) |
Net cash flow used in operating activities |
(5,098 |
) |
(5,823 |
) |
|
|
|
Financing activities |
|
|
Issuance of common shares |
22,938 |
|
- |
|
Transactions costs paid |
(1,859 |
) |
- |
|
Payment of long-term debt |
(623 |
) |
(206 |
) |
Proceeds from warrants exercised |
- |
|
2,423 |
|
Payment of lease liabilities |
(73 |
) |
(73 |
) |
Total cash flow from financing activities |
20,383 |
|
2,144 |
|
|
|
|
Net change in cash during the period |
15,285 |
|
(3,679 |
) |
Foreign exchange on cash |
(318 |
) |
146 |
|
Cash – Beginning of period |
26,213 |
|
46,517 |
|
Cash – End of period |
41,180 |
|
42,984 |
|
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