Profound Medical Announces Third Quarter 2020 Financial Results

TORONTO, Nov. 05, 2020 (GLOBE NEWSWIRE) -- Profound Medical Corp. (NASDAQ:PROF; TSX:PRN) (“Profound” or the “Company”), the only company to provide customizable, incision-free therapies which combine real-time Magnetic Resonance Imaging (“MRI”), thermal ultrasound and closed-loop temperature feedback control for the radiation-free ablation of diseased tissue, today reported financial results for the third quarter ended September 30, 2020, and provided an update on its operations.

Recent Corporate Highlights

  • On July 21, 2020, Profound closed an underwritten offering of common shares, including the full exercise of the over-allotment option, resulting in the issuance of 3,172,414 common shares at a price of US$14.50, for gross proceeds of approximately US$46 million.
     
  • As of the end of October 2020, there were six TULSA centers in the United States recruiting patients, an increase from two at the end of Q2-2020.

“The continued execution of our growth plan resulted in a more than four-fold increase in revenue in Q3-2020 compared to the third quarter of 2019,” said Arun Menawat, Profound’s CEO and Chairman. “The recent financing sufficiently strengthened our balance sheet to enable us to make important decisions about strategically and responsibly supporting revenue growth by bolstering our management team, field force, clinical development programs and manufacturing capacity. We look forward to updating investors as we progress.”

Summary Third Quarter 2020 Results

All amounts, unless specified otherwise, are expressed in Canadian dollars and are presented in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting.

For the third quarter ended September 30, 2020, the Company recorded revenue of $2,980,710 with $2,464,563 from the sale of product, $134,500 from pay per procedure and $381,647 attributable to service revenue. Third quarter 2020 revenue increased approximately 337% from $682,224 in the same three-month period a year ago.

The Company recorded a net loss for the three months ended September 30, 2020 of $8,136,294, or $0.43 per common share, compared to a net loss of $6,269,904 or $0.57 per common share, for the three months ended September 30, 2019. The increase in net loss was primarily attributed to an increase in research and development (“R&D”) expenses of $1,325,088, an increase in general and administrative (“G&A”) expenses of $427,182, an increase in selling and distribution expenses of $706,695 and an increase in net financing costs of $879,005. This was offset by an increase in gross profits of $1,674,852.

Expenditures for R&D for the three months ended September 30, 2020 were $4,749,673, compared to $3,424,585 for the three months ended September 30, 2019. Materials, share based compensation, salaries and benefits and tax credits increased by $1,248,985, $183,215, $209,865, and $47,772, respectively. These increases were due to higher spending on materials and R&D projects for technology improvements and upgrades, options awarded to employees, increased R&D personnel and ineligibility of Scientific Research and Experimental Development (SRED) cash tax credits from the government of Canada. Offsetting these amounts were decreases in consulting fees and travel of $347,658 and $24,345, respectively. These decreases were due to lower spending on consultants as additional employees were hired to replace consultants and lower travel costs due to COVID-19 restrictions.

G&A expenses for the three months ended September 30, 2020 increased by $427,182 compared to the three months ended September 30, 2019. Salaries and benefits, share based compensation, insurance and software expenses increased by $52,740, $236,986, $406,633 and $113,165, respectively, due to increases in salaries, options awarded to employees, insurance costs associated with being Nasdaq listed and software costs due to COVID-19 and annual subscriptions. Offsetting these amounts were decreased consulting fees of $340,205 and travel costs of $26,873, which were due to one-time Nasdaq listing fees incurred in 2019 and COVID-19 travel restrictions. Depreciation expenses decreased by $17,977 due to certain assets being fully depreciated.

Liquidity and Outstanding Share Capital

As at September 30, 2020, the Company had cash of $110,402,232.

As at November 5, 2020, Profound had an unlimited number of authorized common shares with 19,625,954 common shares issued and outstanding.

For complete financial results, please see our filings at www.sedar.com and our website at www.profoundmedical.com.

Conference Call Details

Profound Medical is pleased to invite all interested parties to participate in a conference call today, November 5, 2020, at 4:30 pm ET during which time the results will be discussed.

Live Call: 1-844-407-9500 (Canada and the United States)
  1-862-298-0850 (International)
   
Replay: 1-919-882-2331
Replay ID: 38213

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.

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. 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, uterine fibroids and palliative pain treatment. 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 pharmaceutical industry, 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

 
Profound Medical Corp.
Interim Condensed Consolidated Balance Sheets
(Unaudited)
         
         
  September 30,
2020
$
  December 31,
2019

$
 
     
Assets    
     
Current assets    
Cash 110,402,232   19,222,195  
Trade and other receivables 6,325,986   4,058,136  
Investment tax credits receivable -   240,000  
Inventory 6,590,909   4,764,458  
Prepaid expenses and deposits 124,397   1,335,620  
Total current assets 123,443,524   29,620,409  
     
Property and equipment 799,184   684,718  
Intangible assets 2,226,886   3,128,820  
Right-of-use assets 1,916,734   2,199,381  
Goodwill 3,409,165   3,409,165  
     
Total assets 131,795,493   39,042,493  
     
Liabilities    
     
Current liabilities    
Accounts payable and accrued liabilities 2,401,240   3,933,114  
Deferred revenue 565,991   654,763  
Long-term debt -   5,144,461  
Warranty provision 205,077   134,956  
Other liabilities 104,848   286,858  
Derivative financial instrument 496,843   254,769  
Lease liabilities 388,723   258,685  
Income taxes payable 241,797   15,763  
Total current liabilities 4,404,519   10,683,369  
     
Long-term debt -   6,719,924  
Deferred revenue 1,006,379   829,784  
Warranty provision 28,509   19,005  
Lease liabilities 1,841,771   2,125,873  
     
Total liabilities 7,281,178   20,377,955  
     
Shareholders’ Equity    
     
Share capital 257,999,788   130,266,880  
Contributed surplus 16,511,270   19,580,338  
Accumulated other comprehensive gain/(loss) 160,265   (117,188 )
Deficit (150,157,008 ) (131,065,492 )
     
Total Shareholders’ Equity 124,514,315   18,664,538  
     
Total Liabilities and Shareholders’ Equity 131,795,493   39,042,493  
         

 

Profound Medical Corp.
Interim Condensed Consolidated Statements of Loss and Comprehensive Loss
(Unaudited)
 
 
  Three
months
ended
September 30,
2020
$
Three
months
ended
September 30,
2019
$
  Nine
months
ended
September 30,
2020
$
  Nine
months
ended
September 30,
2019
$
 
         
Revenue        
Products 2,464,563 528,578   4,953,903   2,342,199  
Services 381,647 153,646   734,795   389,922  
Pay per procedure 134,500 -   273,453   -  
  2,980,710 682,224   5,962,151   2,732,121  
Cost of sales 1,018,635 395,001   2,829,635   1,172,423  
Gross profit 1,962,075 287,223   3,132,516   1,559,698  
         
Operating Expenses        
Research and development 4,749,673 3,424,585   9,972,757   9,288,686  
General and administrative 2,481,281 2,054,099   7,809,595   5,154,535  
Selling and distribution 1,580,456 873,761   4,210,273   1,499,285  
Total operating expenses 8,811,410 6,352,445   21,992,625   15,942,506  
         
Operating Loss 6,849,335 6,065,222   18,860,109   14,382,808  
         
Net finance (income)/costs 1,043,987 164,982   (328,100 ) 564,216  
         
Loss before income taxes 7,893,322 6,230,204   18,532,009   14,947,024  
         
Income taxes 242,972 39,700   559,507   93,700  
         
Net loss for the period 8,136,294 6,269,904   19,091,516   15,040,724  
         
Other comprehensive loss (income)        
Item that may be reclassified to profit or loss        
Foreign currency translation adjustment - net of tax of $nil (2019 - $nil) 118,064 (49,193 ) 277,453   (107,425 )
Net loss and comprehensive loss for the period 8,254,358 6,220,711   19,368,969   14,933,299  
         
Loss per share        
Basic and diluted net loss per share 0.43 0.57   1.16   1.39  
               

 

Profound Medical Corp.
Interim Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
 
  Nine months
ended
September 30,
2020
$
  Nine months
ended
September 30,
2019
$
 
     
Operating activities    
Net loss for the period (19,091,516 ) (15,040,724 )
Adjustments to reconcile net loss to net cash flows from operating activities:    
Depreciation of property and equipment 333,269   365,604  
Amortization of intangible assets 901,934   846,329  
Depreciation of right-of-use assets 306,548   305,389  
Share-based compensation 2,803,146   1,050,583  
Interest and accretion expense 727,886   1,028,680  
Deferred revenue 87,823   349,229  
Change in fair value of derivative financial instrument 242,074   124,881  
Change in fair value of contingent consideration 51,712   (371,561 )
Foreign exchange on cash (345,200 ) -  
Changes in non-cash working capital balances    
Investment tax credits receivable 240,000   240,000  
Trade and other receivables (2,267,850 ) 1,211,476  
Prepaid expenses and deposits 1,211,223   (189,742 )
Inventory (2,251,280 ) (18,986 )
Accounts payable and accrued liabilities (1,286,992 ) (1,223,625 )
Provisions 79,625   (1,209,347 )
Income taxes payable 226,034   (297,353 )
Net cash flow used in operating activities (18,031,564 ) (12,829,167 )
     
Investing activities    
Purchase of intangible assets -   (250,000 )
Total cash used in investing activities -   (250,000 )
     
Financing activities    
Issuance of common shares 113,950,328   11,500,001  
Transaction costs paid (8,561,086 ) (895,513 )
Payment of other liabilities (233,722 ) (16,203 )
Payment of long-term debt and interest (12,497,993 ) (735,717 )
Proceeds from share options exercised 1,582,567   5,399  
Proceeds from warrants exercised 14,888,885   -  
Payment of lease liabilities (262,578 ) (238,684 )
Total cash from financing activities 108,866,401   9,619,283  
     
Net change in cash during the period 90,834,837   (3,459,884 )
Foreign exchange on cash 345,200   -  
Cash – Beginning of period 19,222,195   30,687,183  
Cash End of period 110,402,232   27,227,299  

Primary Logo

Back to news