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®
systems installed base now totals 50; Profound continues to expect
to grow that to 75 TULSA-PRO® systems in 2024.
- To date,
TULSA-PRO® 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® 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® 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® 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.
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, 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. 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 KilmerInvestor
Relationsskilmer@profoundmedical.com T: 647.872.4849
Profound Medical Corp.Consolidated Balance
SheetsIn USD (000s) |
|
|
|
2023 $ |
|
|
2022 $ |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
Cash |
|
26,213 |
|
|
46,517 |
|
Trade and other receivables |
|
7,288 |
|
|
6,344 |
|
Inventory |
|
6,989 |
|
|
7,941 |
|
Prepaid expenses and deposits |
|
1,406 |
|
|
1,222 |
|
Total current assets |
|
41,896 |
|
|
62,024 |
|
|
|
|
|
|
Property and equipment |
|
909 |
|
|
899 |
|
Intangible assets |
|
490 |
|
|
680 |
|
Right-of-use assets |
|
616 |
|
|
818 |
|
|
|
|
|
|
Total assets |
|
43,911 |
|
|
64,421 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable and accrued liabilities |
|
3,282 |
|
|
2,033 |
|
Deferred revenue |
|
721 |
|
|
471 |
|
Long-term debt |
|
2,104 |
|
|
523 |
|
Provisions |
|
- |
|
|
58 |
|
Derivative financial instrument |
|
- |
|
|
563 |
|
Lease liabilities |
|
259 |
|
|
239 |
|
Income taxes payable |
|
- |
|
|
298 |
|
Total current liabilities |
|
6,366 |
|
|
4,185 |
|
|
|
|
|
|
Deferred tax liability |
|
59 |
|
|
- |
|
Long-term debt |
|
5,000 |
|
|
6,651 |
|
Deferred revenue |
|
728 |
|
|
764 |
|
Lease liabilities |
|
578 |
|
|
817 |
|
|
|
|
|
|
Total liabilities |
|
12,731 |
|
|
12,417 |
|
|
|
|
|
|
Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
Share capital |
|
217,393 |
|
|
205,825 |
|
Contributed surplus |
|
19,687 |
|
|
18,704 |
|
Accumulated other comprehensive income |
|
12,031 |
|
|
16,837 |
|
Deficit |
|
(217,931 |
) |
|
(189,362 |
) |
|
|
|
|
|
Total Shareholders’ Equity |
|
31,180 |
|
|
52,004 |
|
|
|
|
|
|
Total Liabilities and Shareholders’ Equity |
|
43,911 |
|
|
64,421 |
|
|
Profound Medical Corp.Consolidated Statements of
Loss and Comprehensive LossIn USD (000s) |
|
|
|
2023 $ |
|
2022 $ |
|
|
|
|
|
Revenue |
|
|
|
Recurring - non-capital |
|
6,806 |
|
4,677 |
|
Capital equipment |
|
393 |
|
2,004 |
|
|
|
7,199 |
|
6,681 |
|
Cost of sales |
|
2,817 |
|
3,660 |
|
Gross profit |
|
4,382 |
|
3,021 |
|
|
|
|
|
Operating expenses |
|
|
|
Research and development |
|
14,377 |
|
14,690 |
|
General and administrative |
|
9,168 |
|
9,465 |
|
Selling and distribution |
|
9,453 |
|
8,468 |
|
Impairment of goodwill |
|
- |
|
2,524 |
|
Total operating expenses |
|
32,998 |
|
35,147 |
|
|
|
|
|
Operating loss |
|
28,616 |
|
32,126 |
|
|
|
|
|
Net finance expense (income) |
|
81 |
|
(3,744 |
) |
|
|
|
|
Loss before income taxes |
|
28,697 |
|
28,382 |
|
|
|
|
|
Income tax (recovery) expense |
|
(187 |
) |
287 |
|
Deferred tax expense |
|
59 |
|
- |
|
|
|
|
|
Net loss attributed to shareholders for the
year |
|
28,569 |
|
28,669 |
|
|
|
|
|
Other comprehensive (income) loss |
|
|
|
Item that may be reclassified to loss |
|
|
|
Foreign currency translation adjustment − net of tax |
|
4,806 |
|
(12,091 |
) |
|
|
|
|
Net loss and comprehensive loss for the year |
|
33,375 |
|
16,578 |
|
|
|
|
|
Loss per share |
|
|
|
Basic and diluted loss per common share |
|
1.35 |
|
1.38 |
|
|
Profound Medical Corp.Consolidated Statements of
Cash FlowsIn USD (000s) |
|
|
2023 $ |
|
2022 $ |
|
|
|
|
Operating activities |
|
|
Net loss for the year |
(28,569 |
) |
(28,669 |
) |
Adjustments to reconcile net loss to net cash flows from operating
activities: |
|
|
Depreciation of property and equipment |
727 |
|
672 |
|
Amortization of intangible assets |
202 |
|
704 |
|
Depreciation of right-of-use assets |
217 |
|
228 |
|
Share-based compensation |
3,417 |
|
4,238 |
|
Interest and accretion expense |
770 |
|
174 |
|
Deferred revenue |
187 |
|
(27 |
) |
Change in fair value of derivative financial instrument |
232 |
|
275 |
|
Net change in amortized cost of trade and other receivables |
146 |
|
(290 |
) |
Impairment of goodwill |
- |
|
2,524 |
|
Changes in non-cash working capital balances |
|
|
Trade and other receivables |
(956 |
) |
(1,424 |
) |
Prepaid expenses and deposits |
(158 |
) |
(157 |
) |
Inventory |
353 |
|
(1,864 |
) |
Accounts payable and accrued liabilities |
1,356 |
|
(566 |
) |
Deferred tax liability |
58 |
|
- |
|
Provisions |
- |
|
(24 |
) |
Income taxes payable |
(299 |
) |
311 |
|
Foreign exchange on cash |
20 |
|
(1,905 |
) |
Net cash flow used in operating activities |
(22,297 |
) |
(25,800 |
) |
|
|
|
Financing activities |
|
|
Proceeds from long-term debt |
- |
|
7,273 |
|
Long-term debt transaction costs |
- |
|
(149 |
) |
Payment of long-term debt |
(912 |
) |
(44 |
) |
Proceeds from share options exercised |
245 |
|
263 |
|
Proceeds from warrants exercised |
2,423 |
|
- |
|
Payment of lease liabilities |
(292 |
) |
(312 |
) |
Total cash from financing activities |
1,464 |
|
7,031 |
|
|
|
|
Net change in cash during the year |
(20,833 |
) |
(18,769 |
) |
Foreign exchange on cash |
529 |
|
(1,866 |
) |
Cash – Beginning of year |
46,517 |
|
67,152 |
|
Cash – End of year |
26,213 |
|
46,517 |
|
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