Theralase Increases Revenue 11% in Q12016 Financials

TORONTO, ON / ACCESSWIRE / May 27, 2016 / Theralase Technologies Inc. (“Theralase®” or the “Company“) (TSXV: TLT) (OTC: TLTFF), a leading biotech company focused on the commercialization of medical devices to eliminate pain and the development of Photo Dynamic Compounds (“PDCs“) to destroy cancer, announced today that for the three-month period ended March 31, 2016, total revenue increased from $369,136 to $411,448 for the same period in 2015, an 11% increase.

In Canada, revenue decreased 47% to $180,069 from $344,351, in the US, revenue increased 1,720% to $152,375 from $8,369 and international revenue increased 407% to $79,004 from $15,584. The decrease in Canadian revenue in 1Q2016 and the corresponding increase in US and international revenue is attributable to the Company systematically building its sales and marketing teams in the Canadian and US market and the learning curves associated with training and developing a new sales force.

With the recent TLC-2000 FDA 510(k) clearance and Health Canada approval, Theralase is focusing on recruiting a high performing sales and marketing team in Canada and the US with the mandate of dramatically increasing sales of the TLC-2000 across Canada and the United States in 2016. Once these strategic markets have been established and running independently, Theralase will focus on growing its international revenues through exclusive international distribution agreements.

Cost of sales for the three-month period ended March 31, 2016 was $131,764 (32% of revenue) resulting in a gross margin of $279,684 or 68% of revenue, compared to a cost of sales of $135,156 (37% of revenue) in 2015, resulting in a gross margin of $233,148 or 63% 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.

Selling and marketing expenses for the three-month period ended March 31, 2016 were $316,254 representing 76% of sales, compared with $184,488 or 50% in 2015. The increase is primarily due to increased spending in marketing and sales personnel, which will augment sales in future financial quarters with the launch of the TLC-2000. Selling expenses are expected to continue to increase in the future as the Company expands in Canada, the US and international markets. On-going investment in sales personnel, marketing events and advertising are necessary expenses to generate and increase revenues in subsequent financial quarters.

Administrative expenses for the three-month period ended March 31, 2016 were $623,314 representing a 36% increase from $456,123 in 2015. Increases in administrative expenses were attributable to the following:

General and administrative expenses increased 17% due to increased spending on investor relations and research scientist activities
Stock based compensation increased by 110% as a result of vesting of stock options to certain employees, directors and officers of the Company in Q22015
Administrative salaries increased by 58% as a result of hiring clinical and educational staff.

Research and development expenses totaled $477,588 for the three-month period ended March 31, 2016 compared to $545,645 in 2015 (12% decrease). Research and development expenses represented 34% of the Company’s operating expenses for the period and represent direct investment into the research and development expenses of the TLC-3000 anti-cancer technology.

The net loss for the three-month period ended March 31, 2016 was $1,145,739, which included $171,878 of net non-cash expenses (amortization, stock-based compensation expense, foreign exchange gain/loss and lease inducements). This compared to a net loss for the same period in 2015 of $933,643 which included $165,531 of net non-cash expenses. The PDT division represented $840,449 of this loss (73%). The increase in net loss is due to increased investment in research and development of the TLC-3000, sales, marketing and administrative personnel, all related to the launch of the next generation TLC-2000 therapeutic medical laser system and the commencement of a Phase Ib clinical study for Non-Muscle Invasive Bladder Cancer (“NMIBC“).

Theralase has been very successful in executing on its strategic objectives in 2015 and 1Q2016 by successfully completing:

Health Canada Medical Device Licence (Class III) approval of its next generation TLC-2000 Therapeutic Medical Laser System
US Food and Drug Administration (“FDA“) 510(k) clearance of the TLC-2000
Health Canada Clinical Trial Application (“CTA“) approval
Princess Margaret Cancer Centre, University Health Network (“UHN“) Research Ethics Board (“REB“) approval
6 month accelerated stability and 9 month long term stability of it lead anti-cancer PDC TLD-1433
A Clinical Research Agreement (“CRA“) with UHN to conduct a Phase Ib clinical study for the indication of NMIBC

Theralase is currently completing sterilization, biocompatibility and mechanical testing of the TLC-3200 medical laser probes used to activate TLD-1433 that has absorbed into bladder cancer lesions and submit the information to Health Canada, via an Investigational Testing Authorization (“ITA”) mid-June 2016 for approval on or about the end of June 2016.

Health Canada requires information and testing that supports:

Biocompatibility (the materials that enter the body are proven not harmful to tissue)
Mechanical testing (the materials demonstrate the characteristics of functional reliability, tensile strength and repeatability of operation)
Sterility (the materials that enter the body are demonstrated to be sterile)

Pending ITA approval from Health Canada, Theralase and UHN will immediately commence enrollment of patients inflicted with NMIBC into a Phase Ib clinical trial.

The Phase Ib NMIBC clinical study protocol will commence by instilling a low dose of TLD-1433 drug into the bladders of three (3) patients with subsequent light activation using the TLC-3200 medical laser. These three (3) patients will then be monitored for thirty (30) days to ensure safety and tolerability of the procedure. If no adverse events are reported, then an additional six (6) patients will be enrolled at a high dose, followed by light activation and follow-up monitoring for six (6) months.

The Phase Ib NMIBC clinical trial will evaluate TLD-1433 for the primary endpoints of safety and tolerability, with a secondary endpoint of pharmacokinetics (where the PDC accumulates in the body and how it exits the body) and an exploratory endpoint of efficacy in a patient population defined by UHN uro-oncology department to enable drug approval.

If safety and tolerability of the procedure is demonstrated in these nine (9) patients, the Phase Ib study results will support Health Canada approval and a Phase IIb multi-center efficacy study for NMIBC will be commenced in Canada, the United States and Europe.

Mr. Dumoulin-White concluded that, “The Company has successfully executed on the majority of its strategic initiatives in 2015 and 1Q2016 and is anticipating ITA approval in or around the end of June 2016 to allow an immediate commencement of a Phase Ib clinical study for NMIBC, which will allow the Company to dramatically increase shareholder value in 2016 by demonstrating the safety, tolerability and as an exploratory outcome measure efficacy of next generation anti-cancer technology.”

About Theralase Technologies Inc.

Theralase Technologies Inc. (“Theralase®” or the “Company“) (TSXV: TLT) (OTC: TLTFF) in its Therapeutic Laser Technology (“TLT“) Division designs, manufactures, markets and distributes patented super-pulsed laser technology indicated for the: elimination of pain, reduction of inflammation and dramatic acceleration of tissue healing for numerous nerve, muscle and joint conditions. Theralase’s Photo Dynamic Therapy (“PDT“) Division researches and develops specially designed molecules called Photo Dynamic Compounds (“PDCs“), which are able to localize to cancer cells and then when laser light activated, effectively destroy them.

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

This press release contains forward-looking statements, which reflect the Company’s current expectations regarding future events. The forward-looking statements involve risks and uncertainties. Actual results could differ materially from those projected herein. The Company disclaims any obligation to update these forward-looking statements.

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:

Roger Dumoulin-White
President & CEO
1.866.THE.LASE (843-5273) ext. 225
416.699.LASE (5273) ext. 225
rwhite@theralase.com
www.theralase.com

SOURCE: Theralase Technologies Inc.

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