Theralase Technologies Full Year 2024 Earnings: Beats Expectations

Theralase Technologies Inc. (TSXV: TLT) (OTCQB: TLTFF) has released its audited consolidated financial statements for the twelve-month period ended December 31st, 2024, and the results are nothing short of impressive. The clinical-stage pharmaceutical company, dedicated to the research and development of light, radiation, sound, and drug-activated small molecules, has shown resilience and strategic acumen in navigating the challenging biotech landscape. Let's dive into the numbers and the story behind them.

Revenue and Gross Margin

Theralase reported a 3% decrease in total revenue to $1,033,431 compared to 2023. While this might seem like a setback, it's important to note that the company achieved a gross margin of 54%, with cost of sales at $479,406. This indicates that Theralase is managing its production costs effectively, despite the slight dip in revenue. The gross margin increase, as a percentage of sales, year over year, is attributed to a write-down of obsolete inventory of $89,325 in 2023. This strategic move allowed the company to streamline its operations and focus on more profitable ventures.

Expense Management

One of the standout features of Theralase's 2024 financial performance is its expense management. Administrative expenses decreased by 9% to $1,734,066, and research and development expenses decreased by 8% to $2,735,674. These decreases are significant, as they indicate that the company is managing its costs effectively without compromising on innovation. The decrease in research and development expenses is primarily attributed to a reduction in costs for Study II patient enrollment and treatment. This cost-cutting measure allowed Theralase to allocate resources more effectively towards other innovative projects.

Net Loss and Operational Highlights

Theralase reported a net loss of $4,256,114 for 2024, with the Drug Division accounting for 84% of the loss. While this net loss is significant, it is important to note that many biotech companies operate at a loss for several years as they invest in research and development and seek regulatory approval for their products. Theralase's operational highlights for 2024 include a groundbreaking clinical study into how Theralase® Cool Laser Therapy ("CLT") can be used as a treatment for Parkinson's Disease. This collaboration with researchers at the University of Windsor and a Windsor-based chiropractor demonstrates Theralase's commitment to innovation and its potential to make a real-world impact.

Break Through Designation Update

Theralase submitted pre-Break Through Designation ("BTD") submissions to the FDA and is currently working with Clinical Study Sites ("CSSs") and a regulatory organization to update the pre-BTD submission with clinical data clarifications identified by the FDA. The company plans to resubmit the pre-BTD submission to the FDA in 1Q2025 for FDA review of these clarifications. Once the pre-BTD submission has been accepted by the FDA, the company plans to compile a BTD submission for review by the FDA in support of the grant of a BTD approval. This strategic move could potentially accelerate the regulatory approval process for Theralase's innovative treatments.

Study II Interim Clinical Data

Theralase has enrolled and treated 79 patients in Study II, who have been provided the primary Study Procedure by the CSSs. The company plans to complete Study II enrollment by mid-2025. 95% (75/79) of treated patients have been evaluated at the 90 days assessment for treatment safety and efficacy according to the clinical study protocol. 81% (64/79) of treated patients have completed the clinical study for treatment safety and efficacy or have been prematurely removed by the PI according to the clinical study protocol. For the primary endpoint of Study II (CR at any point in time), 62.5% (40/64) of patients provided the Study Procedure (Study Drug activated by the Study Device) demonstrated a CR. Including patients who demonstrated an IR (negative cystoscopy and positive or suspicious urine cytology), the TR increases to 68.8% (44/64). These interim clinical data are promising and indicate that Theralase's treatments have the potential to make a significant impact on patient outcomes.

Conclusion

Theralase Technologies' 2024 financial performance is a testament to its strategic acumen and resilience in the biotech sector. The company has managed to balance cost-cutting measures with continued innovation and development of new treatments. While the net loss is significant, it is not uncommon for biotech companies to operate at a loss for several years as they invest in research and development. Theralase's commitment to innovation and its potential to make a real-world impact make it a company to watch in the biotech sector.