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Theraclion comments on its 2017 half-year results

  • Already 11 commercial agreements signed: + 120% V1H'16
  • 0.6M € of sales : + 21% V1H'16
  • Tight control of operational expenses

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

THERACLION (Paris:ALTHE) (Alternext, FR0010120402 - ALTHE), a company specialized in leading-edge medical equipment for echotherapy, today announces its consolidated half year results ended June 30, 2017, approved by the Board of Directors on September 19, 2017 and having undergone a limited review by the auditors. The certification report will be issued after verification of the interim financial report.

David Caumartin, Theraclion CEO, says: "Theraclion accelerates its growth in the first half of 2017 with the signature of 11 commercial agreements1, compared to 5 over the same period during the previous year. This first half, particularly active, is preparing for a strong sales acceleration while keeping our operating expenses under control. We pursue our objectives of developing our current markets and opening up new territories and new therapeutic indications. Given this growing commercial dynamic, Theraclion anticipates the doubling of commercial agreements1 in 2017 compared to 2016."

Consolidated results - First half 2017

In K€ 30/06/2017 30/06/2016 Var. %
Revenues 561 463 21%
from equipment sales 456 294 +55%
from equipment rent 24 101 -76%
from consumables 52 56 7%
from services 28 13 +115%
Subventions 42 51 -18%
Other products 98 9 X10
Operating income 700 523 34%
Purchase of goods and external charges (2 554) (1 979) 29%
Other operating expenses (2 330) (2 368) -2%
Net operating income (4 184) (3 825) 9%
Financial income (110) (135) -19%
Extraordinary income (4) (2) +100%
Research tax credit 652 470 39%
Net result (3 646) (3 492) 4%
Average number of employees 35 35 na

1 Commercial agreements cover equipment sales and the provision of equipment for which Theraclion charges either rent or "on a fee" basis.

In the first half of 2017, Theraclion achieved consolidated sales of K€ 561, an increase of 21% compared to the first half of 2016. The Company recorded 11 sales agreements: 8 Echopulse® orders, of which 2 were already transferred and 3 contracts for the provision of equipment against fee-for-service, including 1 in Hong Kong.

Equipment sales generated a turnover of K€ 456, up 55% compared with the first half of 2016. Equipment leases at K€ 24 decreased by 76% compared to the first half of 2016 due to the option to purchase of Echopulse on two of the three sites leased at the end of fiscal year 2016. While the number of clinical routine treatments increased by 77%, the sale of consumables decreased by 7% compared to the first half of 2016 at K€ 56. As the supply chain matures and delivery times reduce, customers no longer constitute forecast inventories as they did in 2016. The increase in sales of services to K€ 28 (+ 115%) reflects the subscription of maintenance contracts for systems that come out of the warranty period.

June 2017 June 2016 Evolution % Evolution
Thyroid 168 113 +55 +49%
Breast 63 43 +20 +47%
Other 6 0 +6 NA
TOTAL Treatments 237 156 81 +52%
% Treatments outside Theraclion-sponsored studies 93% 80% +1300pts +13%
Number of treatments outside Theraclion sponsored studies 221 125 +96 +77%

Theraclion pursues its commercial and R&D efforts while controlling its costs and operating expenses, which vary proportionally to average headcount stable at 35 at June 30, 2017. Purchases of goods and external expenses increased by 29% to K€ 2,554 due to the increase in sales and the cost incurred from the clinical trial currently going on to obtain market access for Echopulse in the United States for the indication of breast fibroadenoma. Other operating expenses decreased by 2% in line with the decrease in the workforce. The Company maintains its sustained investment policy with total R&D costs of M€ 2.1 (compared with M€ 1.8 in the first half of 2016). The operating loss amounted to K€ 4,184 at the end of June 2017, compared with K€ 3,825 at the end of June 2016, an increase of 9%.

Impact of interests due to BPI of K€ 110 brings the consolidated result for the first half of 2017 to a loss of K€ 3,646 compared to a loss of K€ 3,492 over the same period in 2016.

Cash position

At June 30, 2017, Theraclion’s available cash totaled K€ 2,077 versus K€ 2,017 on June 30, 2016. This cash does not include the K€ 1,036 payment received from the Bpi on July 4 under the TUCE program framework. The monthly cash consumption of the Company is down 10% compared to 2016, around K€ 810 per month, despite a rise in working capital requirement resulting from anticipated ordering of parts in the first half of the year (around K€ 900) to facilitate the transition from the production of Echopulse to a French manufacturer, which is expected to reduce costs and working capital requirement in the first half of 2018.

The company continues its efforts in funding research to secure its needs for the year 2018 to ensure continuity of business

Signature of a Joint Venture agreement to enter Chinese market

In April 2017, a joint venture agreement was signed with Inner Mongolia Furui Medical Science Co., Ltd., (https://www.bloomberg.com/quote/300049:CH). Theraclion will own 56% of Theraclion China Co., Ltd. and Inner Mongolia Furui Medical Science Co., Ltd. 44%.

The joint venture, Theraclion China Co., Ltd., will be based in Shenzhen (China). Its ambition is to develop echotherapy for benign thyroid nodules and breast fibroadenomas using Echopulse®. Every year in China, one million surgeries of benign thyroid nodules and 700,000 breast fibroadenoma surgeries are performed.

This represents more than 50% of the interventions carried out every year in the world in the treatment of these pathologies. China is the largest market potential for Echopulse®. High Intensity Focused Ultrasound is a well-established treatment method in China. Specific public reimbursement codes already exist.

Forfait Innovation in France

The decree concerning the reimbursement for its medical device Echopulse® for the treatment of breast fibroadenomas, pursuant to the article L. 165-1-1 of the Social Security Code, was published in the Official Gazette in June.

This flat-rate coverage is for a period of four years. It will be effective in a multicenter, randomized study comparing treatment with Echopulse® to the reference treatment by surgery. The amount of the package includes patient care and the associated hospitalization expenses and is thus set per patient at 1,300 €. In case a sufficient expected benefit is obtained at the end of the study, the Economic Committee for Health Products or, as the case may be, the health insurance, will fix a final pricing for breast fibroadenoma treatment with echotherapy. Twelve highly reputed centers from all over France, both from the private and the public sector, will participate in the study. All treatments performed in these centers will be reimbursed by the French Health Insurance. Thus, six hundred patients, among which 150 within the study, will be eligible for this coverage.

FDA authorization to start a trial in metastatic breast cancer treatment associating immunotherapy and echotherapy

The University of Virginia (UVA), Theraclion’s long-term academic partner, has received authorization from the U.S. Food and Drug Administration (FDA) to proceed with a new clinical study in oncology. This study aims at evauating the potential of treatment combining echotherapy delivered by Theraclion’s equipment Echopulse® with pembrolizumab, a modern immunotherapy drug targeting PD-1 checkpoint Inhibitor.

UVA has been equipped with Theraclion’s echotherapy system Echopulse® since 2014. The Echopulse is being evaluated in a feasibility study in the US for non-invasive treatment of breast fibroadenomas.

Immunotherapy stimulates the body’s own immune system to fight tumor cells. HIFU, which has already demonstrated its efficacy in the treatment of malignant and benign tumors, could have a major impact on the efficacy of immunotherapy when delivered as a combined treatment, by accelerating the immune response triggered by drugs and HIFU combined treatment. The clinical trial is expected to begin patient accrual at UVA in October 2017, and will be a two-arm study of 12 patients. Patients in Arm A will be treated with pembrolizumab first followed by HIFU treatment; Arm B will be the reverse. (A replay of the conference webcast presenting the study is available on Theraclion website at www.theraclion.com.)

Increased number of scientific publications

As of June 30, 2016, there were 9 scientific publications on echotherapy, of which 4 highlighted the efficacy and tolerance of the procedure in patients with breast fibroadenomas and 5 in patients treated for benign thyroid nodules. In the first half of 2017, the number of publications increased significantly with 7 new articles (1 on the breast and 6 on the thyroid) in renowned journals such as Radiology or Thyroid, bringing the total number of publications to 16 as of June 2017. It should be noted that the first promising results in Graves' disease, a new indication for echotherapy, were published in the prestigious journal Radiology.

Expansion of Echotherapy Reimbursement Coverage to 14 Million Lives in Germany

The German Insurance Union BKK Landesverband Nordwest now covers echotherapy for both breast fibroadenomas and thyroid nodules, bringing the number of covered patients to 14 million. The BKK Landesverband Nordwest (LV NW) comprises 21 insurance companies, which together cover approximately 3 million insured people mainly in the Northwest of Germany but also all over the country. The LV NW is in charge of designing contract policies and organizing regional care. The special care program LV NW has established now covers echotherapy via an integrated care contract. The coverage will be available for all patients participating LV NW member insurance companies regardless of whether they live in the Northwest or somewhere else in Germany. This milestone program therefore is of major importance for the centers in Leipzig, Hamburg, Paderborn, Bottrop, Coburg and Frankfurt.

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 34 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 Alternext Paris
PEA-PME Eligible
Mnemonic: ALTHE - ISIN Code: FR0010120402

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Theraclion
David Caumartin, +33 (0)1 55 48 90 70
CEO
david.caumartin@theraclion.com
or
Kalima
Press Relations
Florence Calba, + 33 (0)1 44 90 82 54
fcalba@kalima-rp.fr
or
The Ruth Group (U.S.)
Investor Relations / Public Relations
Robert Flamm / Kirsten Thomas, +1-646-536-7017 / +1-508-280-6592
rflamm@theruthgroup.com / thomas@theruthgroup.com

Source: Theraclion