Clinical Laserthermia Systems

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Significant events in the second quarter of 2023

• CLS began research collaboration with the National Institutes of Health Clinical Center (NIHCC) in the US under which the NIHCC will begin using  and evaluating the TRANBERG Thermal Therapy System for ultrasound-guided treatment of prostate cancer. In June, CLS received the first order from NIHCC worth SEK 0.85 million for materials for the study.
• CLS signed a Mobile Service Provider agreement with AVANT Concierge Urology whereby CLS will provide the TRANBERG Thermal Therapy System, including consumables, training and on-site clinical and technical support to AVANT physicians and staff, for a fee per treatment. Shortly afterwards, AVANT successfully treated the first patients.
• CLS entered into an agreement with Unio Health Partners to conduct a phase 1 clinical trial of the CLS TRANBERG Thermal Therapy System for image-guided focal laser ablation together with the ExactVu micro-ultrasound platform from Exact Imaging Inc.
• CLS announced that all five glioblastoma patients in the study at Skåne University Hospital have been safely treated and that the study is being extended to treat up to 10 additional patients.
• The CLS Board of Directors announced its intention to propose to an extraordinary general meeting to resolve on a rights issue corresponding to approximately SEK 135 million, followed by an option to further raise up to about SEK 50 million through free warrants. The extraordinary general meeting held on June 8 decided to adopt the board's proposal.
• CLS announced that ClearPoint Neuro, CLS' global neurosurgery distributor, has installed two additional ClearPoint Prism Neuro Laser Therapy Systems in the US market. Since then, another system has been installed, bringing the total to four established systems at leading neurosurgical centers in the US.
• CLS entered into a nonexclusive distribution agreement with JSC Real Fusion for the marketing of CLS TRANBERG products in Estonia, Latvia and Lithuania.
• CLS appointed Jimmy Johansson as Executive VP, Operations. Jimmy has worked at CLS since 2015 in various roles with a focus on research and development management.

Significant events after the end of the period

• CLS' rights issue, which closed on July 3, raised SEK 114.2 million before issue costs. Through the rights Issue, a total of 1,141,558,050 B-shares and 228,311,610 warrants of series TO 6 B were issued. With the issue proceeds received, CLS paid off SEK 49 million on the previous loans from Buntel AB, Lubrica Equity AB and Formue Nord Fokus A/S. A directed offset issue was carried out to underwriters who chose to receive underwriting remuneration in the form of new units, consisting of a total of 31,356,000 new B-shares and 6,271,200 new free of charge warrants of series TO 6 B, in the Company.

Comments from CEO Dan J. Mogren

New commercial agreements bear fruit in the US

It is with confidence that I present Clinical Laserthermia Systems' half-year report for January through June. During the period, we continued our efforts to contribute to improved care and increased quality of life for patients with cancer and neurological diseases. With the aim of reaching a positive cash flow by the end of 2025, we are continuously endeavoring to create growth and commercial success by establishing and selling our laser ablation systems for image-guided minimally invasive treatment in the urology and neurosurgery segments in the US, Europe and the Asia-Pacific region, with an initial focus on the US market. 

Cost trends and sales

Costs in the second quarter are in line with last year, whereas we incurred higher personnel costs from our investments in the US commercial organization, offset by lower external costs. Cost developments are in line with our plan, financing investment in our organization with cost savings in external costs. The overall cost trend is in line with our expectations and is trending positively towards our full-year target. We also saw a spike in sales driven by the commercial efforts in the US (urology), with recurring sales from our first commercial customer operating in the Urology Concierge segment, as well as sales to the National Institutes of Health Clinical Center.

We will also see an improvement of the result after financial items for the remaining year as the loans are fully repaid now. In the first half of 2023, interest expenses totaled to SEK 6.5 million. 

New important contracts and additional customer orders secured

During the second quarter, our subsidiary in the US achieved several successes in addressing the urology market with sales of the TRANBERG Thermal Therapy System for ultrasound image-guided focal treatment of localized prostate cancer.

Continuous clinic visits and a number of product demonstrations have been carried out during the period, resulting in a strategic research and development collaboration with the US National Institutes of Health Clinical Center in Washington D.C.. The agreement generated an initial sale of products worth approximately SEK 0.85 million. A full-service agreement was subsequently signed with the urology clinic AVANT Concierge Urology in Florida. Under the agreement, TRANBERG products and clinical support are provided on-site at AVANT for a fee per treatment. The agreement allows for a quick start-up and generated immediate revenue as the first patients were successfully treated during the quarter.

Through JSC Real Fusion, which CLS entered into an agreement with during the quarter, work on the urology market in the Baltic States and Europe has now also begun. Through a nonexclusive distribution agreement with Real Fusion, CLS now covers the entire Baltic market with the TRANBERG portfolio.

During the quarter, we reached a total of five agreements regarding the TRANBERG Thermal Therapy System for ultrasound image-guided laser ablation as a minimally invasive focal treatment of localized prostate cancer. Three of these contracts include an initial evaluation of the TRANBERG system in combination with the customer's existing ultrasound image guidance equipment. All these agreements are examples of successes in line with the first pillar of our growth strategy, i.e., to grow through the establishment of CLS TRANBERG products and services in minimally invasive treatment of prostate cancer with ultrasound image-guided laser ablation.

Overall, this shows that we have momentum in our commercial rollout and establishment.

Several Prism systems installed 

As part of ClearPoint Neuro's limited market launch of the ClearPoint Prism Neuro Laser Therapy System for the treatment of brain tumors and drug-resistant epilepsy in the US, several new systems were installed during the period, and the number of patients treated increased. So far, four systems have been installed in the US and one in Europe. The collaboration with ClearPoint Neuro is within the second pillar of the growth strategy: minimally invasive treatment of brain lesions with MR image-guided laser ablation.

Regarding the third pillar of the growth strategy, global scale-up, the assessment remains that the US will generate the majority of CLS's sales revenue in 2023 and that other markets will contribute with increased sales from 2024 onwards. 

The study at Skåne University Hospital with the company's Prism system is continuing with another 10 patients, the first of which was successfully treated before the summer. Clinical data from the study will form the basis for future CE marking. Additional clinics in Europe are now being sought to participate in additional studies.

Strengthening the organization

To ensure our continued growth, we are continuously reviewing the CLS organization. During the quarter, Jimmy Johansson was appointed as Executive Vice President of Operations with the task of ensuring the company's delivery to the market and being part of the management team. We also appointed Joel Hix as Head of Clinical Operations and recruited Rick Wilderotter from Healthtronics to a new position as VP Business Development, both working at the subsidiary in the US. I welcome them all in their new roles in the Group.

Looking ahead

Going forward, CLS will mainly capitalize on existing market approvals. The priority is to succeed in the US market, which will require hard work from our US team. By dealing with urology clinics directly, we secure the process and our margins. During the autumn, we selected a number of conferences where potential customers from urology clinics such as doctors’ offices and ambulatory service centers will attend, to further increase awareness of our TRANBERG Thermal Therapy System for ultrasound image-guided focal treatment of localized prostate cancer.

A general trend we see is that market authorizations require more resources and more time than before. For example, the product approval in Singapore has taken longer than expected, but we expect it to be in place and able to generate sales revenue in 2023.

Regarding the continued shortage of components, which primarily affects the supply chain, we see no further deterioration. However, CLS has analyzed which components of our system could pose a risk and built up a stockpile to protect against any future delivery delays.

Due to the internal processes of the US-based diagnostics company HALO Precision Diagnostics, the start of the planned aftermarket study of the CLS TRANBERG Thermal Therapy System for laser ablation treatment of localized prostate cancer has been postponed. However, preparatory activities have been initiated by HALO, and we look forward to updating the market with further information shortly.

Finally, I would like to thank all shareholders who participated in the rights issue, which was completed after the end of the period, and strengthened CLS's cash position by approximately SEK 114 million (before issue costs). We are very pleased to have achieved a capital raising of this size, which has enabled us to pay off our loans and create a long-term approach to the business in order to achieve our goals and generate profitability.

Dan J. Mogren

CEO, Clinical Laserthermia Systems

This disclosure contains information that CLS is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person set out below, on August 25, 2023 at 08:30 CET.

For more information, please contact:


Dan J. Mogren, CEO
Tel: +46 (0)705 90 11 40

E-mail: dan.mogren@clinicallaser.com

About CLS

Clinical Laserthermia Systems AB (publ) develops and sells the TRANBERG® Thermal Therapy Systems, including Thermoguide™ Workstation and sterile disposables, for minimally invasive treatment of cancer tumors and drug-resistant epilepsy, according to regulatory approvals in the EU and the US. The products are marketed for image-guided  laser  ablation  and  used in studies for  treatment  with  imILT®,  the Company’s interstitial laser  thermotherapy  for immunostimulant ablation with potential abscopal  effects. CLS is headquartered in Lund and has subsidiaries in Germany, the US and Singapore. CLS is listed on the Nasdaq First North Growth Market under the symbol CLS B. The Certified Advisor (CA) is FNCA Sweden AB, Tel: +46 8 528 00 399. E-mail: info@fnca.se

For more information about CLS, please visit the Company's website: www.clinicallaser.se