Theraclion Discloses Its 2017 Annual Results

  • 458 treatments in clinical routine1 +57% vs 2016
  • 4% Loss reduction vs 2016: -6,22 M€ net loss in 2017
  • Cash in hands at M€ 4.9 on 31st December 2017.

MALAKOFF, France--()--Regulatory News:

THERACLION (Paris:ALTHE) (Alternext, FR0010120402 – ALTHE), a company specialized in leading-edge medical equipment for echotherapy, announced today its annual results for the financial year ended 31 December 2017, approved by the Board of Directors on 20 March 2018. The 2017 consolidated financial statements have been audited and the auditors’ report will be issued after validation of the Management Report.

David Caumartin, Directeur Général de Theraclion, declares: «Theraclion continues its development, 15 new centers offer echototherapy in 2017, a growth of 62% compared to the 24 centers of the installed base 2016. Theraclion is particularly vigilant to optimize its expenses and thus reduces its losses by 4% compared to 2016. Theraclion accelerates its development in today's accessible markets, mainly Germany and Hong Kong, and prepares access to strategic markets in the United States and China. Ongoing trials in vein pathology and oncology open the way for new uses of our Echopulse platform. »

Theraclion SA 2017 Annual Results

In thousands of euros   31/12/2017   31/12/2016   Change
Revenue   2,429   1,854   31%
Equipment sales   2,214   1,552   43%
Equipment rental   60   187   -68%
Consumables   91   69   32%
Services   63   45   41%
Subsidies   393   115   243%
Other revenues   0   34   -100%
Total operating revenue   2,822   2,003   41%
Purchases of goods   (1,436)   (1,006)   43%
External costs   (3,790)   (3,673)   3%
Personnel costs   (4,104)   (4,296)   -4%
Other operating expenses   (592)   (515)   15%
Operating income/(loss)   (7,098)   (7,483)   -5%
Net financial items   (256)   (242)   5%
Net non-recurring items   (18)   (18)   0%.
Research tax credit   1,148   1,212   -5%
Net income/(loss)   (6,224)   (6,545)   -4%
             
Average headcount (FTE)   32   32   0%

Change in Reporting Entity

The reporting entity for the presentation of Theraclion's accounts changes with the Company's evolution. The published figures are those of the legal entity Theraclion SA that do not consolidate the contributions of the companies Theraclion APAC Ltd (Hong Kong) and Theraclion China Co., Ltd. (Shenzhen). Sales to these subsidiaries are therefore recorded as sales to third parties. Adjusted for intercompany transactions, the Group's sales amounted to € 1.8 million, down 6% from € 1.9 million at December 31, 2016.

Similarly, the losses of these subsidiaries are not recognized. Theraclion China Co., Ltd. (Shenzhen) did not close its accounts as of December 31, 2017 due to its creation in December 2017 and Theraclion APAC Ltd (Hong Kong) recorded a loss of € 0.3 million in line with 2016.

a) Further sales growth

Theraclion SA recorded 11 sales in 2017, including 8 systems sold in new countries: Poland, Russia and China. In addition, 5 commercial agreements were signed in 2017 allowing access to echotherapy in clinical routine in the university hospitals of La Salpêtrière in Paris, of Frankfurt in Germany and three private sites in Hong Kong (including Baptiste and Sanotorium Hospital). These time-limited agreements generate rental and consumable revenues and represent potential future system sales.

b) Disciplined cost control

Theraclion focuses on commercial and R&D effort and reduces other expenses: when revenues are up 41% from 2016, the increase in expenses is limited to 5%.

Merchandise purchases amounted to € 1.4 million, up 43% due to 31% growth in sales and the growing use of Epacks in ongoing clinical trials to obtain marketing authorization for Echopulse in the United States and the development of new indications (cancer and veins). Other purchases and external expenses of € 3.8 million increased by 3% compared to 2016, mainly due to clinical trials. Staff costs are stable compared to 2016 in line with the workforce. The company maintains its sustained investment policy with total R & D costs of € 3.8 million (versus € 3.2 million in 2016); more than 50% of the workforce is dedicated to it.

After taking into account the financial result at loss of € 256,000 over the year, mainly related to the interest on the repayable advance TUCE and a research tax credit of € 1,148,000, diminishing of 5% due to non-eligible clinical trials abroad, the consolidated result for the year 2017 shows a loss of € 6,224,000, a reduction of 4% compared to a loss of € 6,454,000 in the 2016 financial year.

c) Major events in 2017 and early 2018

4 patients treated in combined immunotherapy trial and first encouraging results presented at ASCO-SITC meeting in San Francisco

Dr. Patrick M. Dillon, MD, UVA Medical Center, Charlottesville, USA, Principal Investigator of the Echotherapy / Immunotherapy Combination Trial, presented his data to the Clinical Immuno-Oncology Symposium at the ASCO Congress American Oncology Clinic) - STIC (Society for Cancer Immunotherapy) (https://immunosym.org), Jan. 25 in San Francisco, USA.

With only 22% survival at 5 years, there is no cure today for women diagnosed with stage IV breast cancer. Immunotherapy, which has brought new hope to other types of cancer, has not been shown to be effective in the treatment of breast cancer, as the immune system does not recognize most breast cancer tumor cells as "foreign". The majority of breast cancers do not activate white blood cells. This is what echotherapy can change by triggering a rapid and localized immune response to cell damage, leading to the recruitment of white blood cells that will infiltrate the tumor. Immunotherapy can then suppress the chemical signal of tumor self-protection, allowing the lymphocytes to attack. "I am delighted to have designed this pilot study that combines pembrolizumab and focused ultrasound therapy for women with metastatic breast cancer. It has the potential to enrich the therapeutic knowledge of cancer on local and systemic immune responses. " Dr. Dillon explains. "I am confident that we will see some of the clinical benefits and immune effects of these therapies, and we hope to be able to draw conclusions about the safety and immune activity of this combination of focused ultrasound with pembrolizumab."

Phase I of the clinical trial is actively recruiting patients:

• 4 patients are recruited to date,

• no concern to date regarding partial ablations of ultrasound tumors in combination with pembrolizumab,

• the most common side effects are limited to pain in the ablation area, fatigue, nausea, and Dyspnea

Theraclion Launches the World's First Study of High-Intensity Focused Ultrasound Treatment of Superficial and Perforating Vein Incontinence of the Lower Limbs.

The trial involves 35 patients (23 of whom have already been treated) who will be followed for 3 months after the procedure. The purpose of the trial is to evaluate the feasibility, abolition of blood reflux, ease of use, patient preference, tolerance and safety of echotherapy.

For all patients treated in the study, the procedure could be performed, and no procedure was interrupted or canceled for treatment-related technical or medical reasons. Most cases were predominantly 50-year-old patients with chronic venous disease with a long history of treatment (including surgeries and endovenous treatments), active or healed ulcers, severe skin disorders, significant venous symptoms and a high BMI. Unlike other thermal endovenous methods, no analgesia has been administered to patients before, during or after treatment. No significant side effects were reported during treatment and the follow-up period (no skin burns, skin discoloration, bruising, erythema, or edema were present during and after the procedure). All patients were satisfied with the procedure.

The treatment market for the incompetence of superficial veins is estimated at around 9 billion euros, including 500 Million €uros for medical devices. The arrival of a completely non-invasive technology should lead to a transformation of the market: the share of value captured by medical devices enhances at the expense of facility and anesthesia-related costs.

Launch of an Investigational Device Exemption (IDE) study of 100 breast fibroadenoma patients started in January 2017 for access to the US market.

Fifty-two out of the planned 100 patients have already been treated in the pivotal clinical trial evaluating the safety and efficacy of Echopulse® echototherapy as a non-invasive treatment for breast fibroadenoma (FA). Recruitment is conducted in four centers in the United States, the University of Virginia Medical School (UVA), NYU Langone Bellevue, the Montefiore Medical Center (NY) and the University Medical Center. New York Presbyterian / Columbia, and two centers in Europe at Tübingen University Hospital in Germany and Sofia Hospital. Patients receive a single high-intensity focused ultrasound treatment with Echopulse®. The primary endpoint is a reduction in fibroadenoma volume, pain, and anxiety.

Theraclion China CO., LTD, acquires 5 Echopulse Systems to Enter the Chinese Market and Thereby Broadens the Overall Echotherapy Market

Theraclion China is a joint venture between Inner Mongolia Furui Medical Science Co., Ltd. (45%), (https://www.bloomberg.com/quote/300049:CH) and Theraclion (55%). First net investment of M€ 0.15 has been paid out and will be followed by another million within 6 to 18 months.

The new headquarters of Theraclion China Co., Ltd. is based in Shenzhen and focuses on the development of Theraclion's Echopulse® Chinese market, a non-invasive medical device that uses high intensity focused ultrasound as an alternative to surgery.

Every year, one million surgeries to extract benign thyroid nodules and 700,000 surgical procedures to remove breast fibroadenomas are performed in China. This represents more than 50% of the surgeries performed to treat these diseases each year around the world and makes China the largest market for Theraclion products.

Echopulse systems transferred to Theraclion China Co., Ltd. will be used for clinical and technical trials in 2018.

First system sold in Catalonia, Spain

The CMDA network, Center Médic Diagnóstic Alomar acquired in February 2018 an Echopulse® system for its ResoFus Alomar center in Barcelona. ResoFus Alomar will thus be the first medical center in Catalonia to offer its patients ultrasound (ultrasound-guided high intensity ultrasound - HIFU) for the treatment of thyroid nodules and mammary fibroadenomas.

The CMDA is a group of 22 diagnostic imaging centers covering Catalonia and the Balearic Islands. ResoFus Alomar will be the first center to offer HIFU treatments guided by MRI and ultrasound. The offer of care will concern uterine fibroids (myomas) and uterine adenomyosis, osteoid osteoma in patients with benign bone lesions, essential tremor, Parkinson's disease, prostate cancer and, thanks to the purchase of Echopulse®, thyroid nodules and breast adenofibromas.

Evolution of cash flow and continuity of operations

In October 2017, Theraclion issued 989,133 new ordinary shares as part of a capital increase with the cancellation of preferential subscription rights by way of private placement. The new shares were subscribed for at a subscription price of € 4.22 per new share, including issue premium, and represents an aggregate amount, including issue premium, of € 4.2 million.

At December 31, 2017, Theraclion's cash position amounted to € 4.9 million. Given its sales prospects (including those resulting from orders received) and its expected cash flow, the Company carried out a specific review of its liquidity risk and implemented actions to ensure continuity. particularly by seeking investors to participate in a capital increase. In addition, Theraclion received contractual commitments signed to ensure its continuity of operations via the implementation of an OCABSA-type financing line for € 18 million.

About Theraclion

Theraclion is a French company specializing in high-tech medical equipment using therapeutic ultrasound. Drawing on leading-edge technologies, Theraclion has designed and manufactured an innovative solution for echotherapy, the Echopulse®, allowing non-invasive tumor treatment through ultrasound-guided high-intensity focused ultrasound. Theraclion is ISO 13485 certified and has received the CE mark for non-invasive ablation of breast fibroadenomas and thyroid nodules. Based in Malakoff, near Paris, France Theraclion has brought together a team of 35 people, 50% of whom are dedicated to R&D and clinical trials. For more information, please visit Theraclion’s website: www.theraclion.com

Theraclion is listed on Euronext Growth Paris
PEA-PME eligible
Mnemonic: ALTHE - ISIN Code: FR0010120402

1 Treatments in clinical routine generate payment by the patient or a paying agency, in contrast to the clinical trials subsidized byTheraclion.
2 The reporting entity for the presentation of Theraclion's accounts changes with the Company's evolution. The published figures are those of the legal entity Theraclion SA that do not consolidate the contributions of the companies Theraclion APAC Ltd (Hong Kong) and Theraclion China Co., Ltd. (Shenzhen). Theraclion China Co., Ltd. (Shenzhen) did not close its accounts as of December 31, 2017 due to its creation in December 2017 and Theraclion APAC Ltd (Hong Kong) posted a loss of € 0.3 million in line with 2016

Contacts

Theraclion
David Caumartin, Tel.: +33 (0)1 55 48 90 70
CEO
david.caumartin@theraclion.com
or
Theraclion
VP Marketing, Market Access & Sales Francophonia
Anja Kleber, Tél.: + 33 (0)6 07 95 44 39
anja.kleber@theraclion.com

Contacts

Theraclion
David Caumartin, Tel.: +33 (0)1 55 48 90 70
CEO
david.caumartin@theraclion.com
or
Theraclion
VP Marketing, Market Access & Sales Francophonia
Anja Kleber, Tél.: + 33 (0)6 07 95 44 39
anja.kleber@theraclion.com