Theralase Technologies (TSXV:TLT) Q2 2026 Earnings Call

0:00 Good morning and thank you for joining us today. I'm Matthew Periton, Investor Relations Manager at Theralase, and it's my pleasure to welcome all the shareholders and stakeholders to our second quarter 2026 Financial Statements Conference Call. We appreciate your ongoing support as Study 2 advances towards regulatory submissions and Theralase continues to develop additional opportunities in both the oncology and infectious disease fields. On August 24, 2026, Theralase closed a brokered financing under a listed issuer financing exemption for gross proceeds of $3.55 million, further strengthening the company's balance sheet as it advances on its clinical, regulatory, and strategic objectives.

0:47 Forward-looking statements. Before we begin, I would like to remind everyone that today's presentation may contain forward-looking statements as defined under applicable Canadian securities laws. Participants should not unduly rely on these forward-looking statements. They are not a guarantee of future performance and there can be no assurance they will prove to be accurate in the future. Thank you for watching. All forward-looking statements are made as of today's date and are subject to change without notice. Except as required by law, the company assumes no obligation to update or revise them. This conference call will be posted on our corporate website in due course.

1:45 Study 2 has completed enrollment and treatment of 95 patients diagnosed with BCG, unresponsive, Non-Muscle Invasive Bladder Cancer, Carcinoma, and Sci-2. 82 patients have completed the study and 13 are in late stage follow-up. Theralase plans to submit a new drug submission to Health Canada and a new drug application to the FDA commencing in the fourth quarter of 2026 under rolling review. Subject to requisite regulatory review and approval in both countries, marketing decisions are anticipated in 2027. If marketing approval is achieved, light-activated Ruvadar could offer BCG-unresponsive non-muscle-invasive bladder cancer carcinoma in situ patients facing radical cystectomy with a bladder-preserving treatment option.

2:36 Beyond the lead program in bladder cancer, new development work includes Commencing patient enrollment in Cohort 2, which uses serolase's light-activated Ruvadar, 2. Good laboratory practice toxicology analysis for the intravenous installation of rutharin for numerous oncology indications, including glioblastoma multiforme, non-small cell lung cancer, muscle invasive bladder cancer, pancreatic cancer, and colorectal cancer. Good Laboratory Practice Toxicology Analysis for Topical Ruvidar, intended for the treatment of herpes simplex virus 1, cold sore lesions.

3:28 These programs position their delays at an important clinical and regulatory inflection point, with both near-term milestones and meaningful mid- and long-term opportunities across numerous oncology indications stretching into the treatment of an infectious disease. Today's call will provide insights into our six-month 2026 financial performance, cash position, and recent financing initiatives. Updated interim clinical data from Study 2 for BCG unresponsive non-muscle invasive bladder cancer carcinoma in situ, regulatory pathway cohort 2 collaboration with Faring Pharmaceuticals, and commercialization strategy. GLP Toxicology for Intravenous Rutheran, and Topical Ruvidar for six new target indications.

4:19 Now that we've covered the required disclosures in our review, I would like to introduce our Chief Financial Officer, Ms. Kristina Hachey.

4:30 Thank you, Matthew. Before we review the numbers, please note that all financial amounts I will be presenting today are rounded to the nearest thousand Canadian dollars for simplicity. For financial amounts accurate to the dollar, please refer to the second quarter 2026 financial statements available on CDAR Plus and our corporate website. For today's discussion, the financial results cover the six-month period ended June 30, 2026. The company's oncology programs remain pre-revenue, so reported revenue continues to be generated solely by the device division. Total revenue was $297,000 compared with $311,000 for the same period in 2025.

5:23 A decrease of 5%. The cost of sales decreased to $147,000 from $179,000. As a result, gross margin increased to $150,000 or 50% of revenue from $132,000 or 42% of revenue. Selling expenses remained essentially unchanged at $139,000 for both 2025 and 2026. Administrative expenses increased 1% to $1,004,000 from $995,000, primarily due to higher professional fees, investor relations, administrative salaries, amortization and depreciation allocation, partially offset by lower stock-based compensation.

6:15 Net research and development expenses decreased 25% to $1.1 million from $1.46 million, primarily due to lower Study 2 patient enrollment and treatment costs as the study begins to wrap up. The net loss for the period was $2,094,000, which includes $287,000 of net non-cash expenses, compared with a net loss of $2,423,000, which includes $486,000 of net non-cash expenses for the same period in 2025. Cash on hand was $5,261,000 as at June 30, 2026 compared with $183,000 as at December 31, 2025. Financing activities raised $6,000,000 Thank you for joining us today.

7:36 through brokered and non-brokered private placements in support of its research and development programs. The June 30th cash balance and recent life financing provide capital for development and commercialization of our oncology programs. Cohort 2 patient enrollment, GLP toxicology for both intravenous rutharin and topical rivadar.

8:00 Thank you, Kristina, for Theralase's second quarter, 2026, financial update. Courtney will now provide an update on our bladder cancer clinical study. Thank you, Matthew. Study 2 remains the company's lead clinical program. This multi-center, single-arm, phase 2, registrational clinical study is evaluating the safety and efficacy of Ruvidar, our light-activated small molecule in patients with BCG-unresponsive, non-muscle-invasive bladder cancer carcinoma in situ. with or without papillary disease. The clinical study sites have enrolled and treated 95 patients. Of these patients, 82 have completed the study and 13 remain on study with clinical data pending.

8:48 As of August 28, 2016, 89 patients had been assessed for response outcomes and were valuable for the primary endpoint. The updated Interim Study 2 results include a 65.2% complete response rate at any point in time with 58 of 89 evaluable patients achieving complete response. A 73% total response rate with 65 of 89 evaluable patients achieving either complete response or indeterminate response. A 40.4% complete response rate at 12 months with 21 of 52 evaluable patients maintaining complete response at 450 days.

9:35 A 19.2% complete response rate at both 2 and 3 years with 10 of 52 evaluable patients maintaining complete response at each extended time point. One patient has demonstrated a complete response for 7 years after one study procedure. Treatment-emergent adverse events included urinary frequency, hematuria, and urinary urgency, which resolved within one month of treatment. There have been 24 serious adverse events reported. The majority were not treatment-related, and none were directly related to the study drug or study device. For the tertiary safety endpoint, 82 of 82 evaluable patients met the endpoint, representing 100%.

10:21 These results are interim in nature. Study 2 remains ongoing and additional clinical data may influence or alter current response trends. Our next milestones include completion of patient follow-up and final clinical data analysis for Study 2, as well as planned submission of a new drug submission to Health Canada and a new drug application to the United States FDA in 2026, under rolling review with regulatory decisions anticipated in 2027. In January 2026, Theralase entered a collaborative clinical development agreement with Faring Pharmaceuticals to add a new cohort to study 2.

11:07 Cohort 2 is intended to investigate the safety and efficacy of combining light-activated Rufidar with Edstiladrine in patients with BCG-unresponsive non-muscle-invasive bladder cancer carcinoma in situ. Theralase will remain the study sponsor with both parties providing clinical oversight through a joint development committee. The cohort is expected to enroll initially in the United States and may expand to Canada or other jurisdictions subject to written agreement. Under the protocol, patients would receive Rufidar through one hour of drug installation followed by one hour of light activation. At a subsequent outpatient visit, patients would receive a one-hour adstilogen installation and may receive up to four adstilogen treatments.

11:56 The presiding uro-oncologist would have the option to deliver an additional ruvidar re-induction study procedure if the patient recurs. Patients would be followed for 15 months after the initial study procedure and for up to three years of post-study follow-up.

12:17 Thank you Courtney for the clinical study update. With the lead regulatory pathway outlined, the company is also building commercialization and partnership readiness around the platform. Commercialization and strategic partnership work is focused on licensing arrangements for Ruvidar in the treatment of BCG unresponsive non-muscle invasive bladder cancer carcinoma in situ across geographic territories. Collaborative clinical research applying light-activated Ruvidar to broader non-muscle invasive bladder cancer indications. Collaborative research combining Ruvidar with other FDA-approved drugs to enhance treatment efficacy. Maintaining access to capital as clinical and regulatory milestones progress.

13:03 Expanded Pipeline Indications In parallel with the lead bladder cancer program, Theralase is advancing a focused pipeline that applies its small molecule platform across oncology and infectious disease, including glioblastoma multiforme, an aggressive form of brain cancer, non-small cell lung cancer, muscle and face of bladder cancer, pancreatic cancer, colorectal cancer, Herpes Simplex Virus 1 lesions, more commonly known as cold sores. For oncology indications, Theron least plans to complete good laboratory practice toxicology studies for Rutheran in the fourth quarter of 2026, including determination of the maximum tolerated dose and corresponding human equivalent dose.

13:52 Subject to regulatory approval, the company intends to commence the design and adaptive phase 0, 1, 2 clinical studies in 2027. The HSV program is a distinct topical Ruvidar opportunity that is currently in preclinical formulation development. Independent University of Manitoba research and Theralase studies have demonstrated that Ruvidar can inhibit HSV1 replication both with and without light actification. In preclinical mouse model, A 1% topical ruvidar solution applied once daily for four days resulted in complete healing of well-developed HSV-1 catinus lesions. In vitro research has also demonstrated activity at lower concentrations than enciclovir, together with additive and synergistic effects when the two agents were combined.

14:47 Preclinical data reported in March 2026 indicated that Ruvadar binds to HSV and neutralizes the virus's surface charge, impairing its ability to enter cells and proliferate. The same work reported up to an 8-log reduction in the infectious virus population in vitro. The company plans to complete GLP toxicology for topical Ruvadar early next year. Subject to regulatory authorization, The intended next steps include an adaptive Phase 1-2 clinical study to evaluate safety and efficacy in the accelerated healing of cold sore lesions. These HSV-1 findings remain preclinical and have not yet been established safety or efficacy in humans. However, the program highlights the versatility of Ruvidar and provides Theralase a potentially significant infectious disease opportunity alongside its oncology portfolio.

15:44 Now I would like to transition to the question and answer portion of today's call. To answer your questions, I would like to call upon our President and Chief Executive Officer, Roger Dumoulin-White. We have grouped the questions received in advance by theme and will address the most common shareholder topics. Roger, welcome and thank you for joining us today.

16:07 Thank you, Matthew. It's a pleasure to be here today. Question 1. Does the company remain on track to commence rolling NDS and NDA submissions before September 30th, and how complete is the clinical data package? More accurately, Health Canada NDS and FDA NDA submissions will commence in the fourth quarter of 2026. Enrollment and treatment are complete, with 82 of 95 patients completing the study and 89 patients already assessed for the primary endpoint. 13 patients remain in follow-up to be assessed for primary, secondary, and tertiary endpoints. Question 2.

16:52 What are the key milestones shareholders should watch over the next 12 to 18 months? Key milestones include Study 2 follow-up and analysis NDS and NDA submissions under rolling review Health Canada and FDA regulatory approvals in 2027 Commencement of Patient Enrollment in Cohort 2 GLP Toxicology Analysis of Intravenous Rutheran and Topical Ruvidar in Q4 2026 and Q1 2027, respectively Adaptive Oncology Clinical Studies commenced in 2027 for five cancer indications and one viral condition, subject to regulatory approval, commercialization, licensing, strategic partnerships, and potential United States stock listing progress.

17:53 Question 3. How should investors interpret the patient counts? And could the remaining data materially change the reported 65.2% complete response rate? 95 patients have been enrolled and successfully treated. 89 have been evaluated for the primary endpoint. 82 patients have completed the study and have been evaluated for the primary, secondary, and tertiary endpoints. 13 patients remain in follow-up with clinical data pending. Since 94% of patients in the study have been evaluated for the primary endpoint and 86% of patients evaluated for all three endpoints, the remaining clinical data is not expected to materially change the reported primary endpoint efficacy of a 65.2% complete response rate.

18:50 As all clinical data for the study is collected and evaluated, The final numbers will certainly fluctuate based on patient response, but not significantly, as the majority of the clinical data has already been analyzed. As an example, only 6 of the 95 treated patients are not currently included in the primary endpoint calculations. Question 4. What is the current status of the HSV-1 program, and what has the preclinical research shown? Topical ruvidar remains in preclinical and formulation development. GLP toxicology completion is planned for the first quarter of 2027, which, pending regulatory approval, an adaptive Phase I-II clinical study in patients with cold sore lesions will commence.

19:45 The preclinical data is encouraging, with efficacy demonstrated both with and without light activation. including complete healing in an aggressive mouse lesion model. These findings will require confirmation in humans, subject to regulatory approval. Question 5. What is the status of Cohort 2 with fairing pharmaceuticals? Theralase's study sponsors preparing to launch Cohort 2 to evaluate light-activated ruvidar The combination brings together two differentiated and potentially complementary approaches in a difficult-to-treat population.

20:37 As the FDA indicated that the existing study-2 dataset can support an NDA without an additional clinical trial, Study 2 was designed as a registrational Phase 2 study, and the encouraging interim clinical data, including efficacy, durability, and safety profile, supports the company's decision to submit both an NDS in Canada and an NDA in the United States. Health Canada and the FDA do not comment on marketing decisions regarding a clinical study, until a full and final evaluation of all clinical data has been completed. Question seven, what are the main takeaways from the Q2 2026 financial results?

21:27 For the six months ended June 30, 2026, revenue was $297,000, gross margin was $150,000, or 50% of revenue, and net loss was $2,094,000. The most encouraging trends were the improvement in gross margin from 42% to 50%, a 25% reduction in research and development expenses, and a 14% reduction in net loss, compared with the same period in 2025. However, these are fairly nominal numbers, and as the company continues to grow both the drug and device divisions in subsequent quarters, total revenue is expected to increase.

22:17 Question 8. How does the August life capital raise strengthen execution, and is the current capital position expected to fund the company As previously mentioned, on August 24, 2026, the company closed a brokered private placement under the life exemption for gross proceeds of $3.55 billion. This is in addition to the $5,261,000 cash balance reported as of June 30th. and hence it meaningfully strengthened the company's financial position.

23:03 The company's capital rule will be used for various initiatives, including Study 2 follow-up, NDS and NDA regulatory submissions, Cohort 2 patient enrollment, GLP toxicology for both intravenous rutharin and topical Bruvidar, and launch of various oncology programs. All of these programs will require additional capital at some point in their development. Therefore, additional funding will be required at strategic inflection points. However, since the company presently has 12 to 18 months of cash flow in the bank, then capital raising will be completed at strategic times for the company.

23:48 Management will continue to evaluate non-dilutive funding opportunities, strategic collaborations and government support programs as equity alternatives. Question 9. Why does management view HSV-1 as an attractive opportunity for Theralase? HSV-1 is one of the world's most prevalent viral infections. The World Health Organization estimates that approximately 3.8 billion people under the age of 50 are infected globally. Recurrent oral lesions are quite often embarrassing and disruptive to an individual's role in society. Existing antiviral treatments help to lessen the impact of viral outbreaks, but advancements are required to shorten the lifespan of the cold sore lesion on a patient's face, and this is what Theralase intends to do.

24:47 For Theralase, the opportunity is compelling. as it combines a very large international patient population with an innate need of those inflicted to shorten the healing time of their disfiguring cold sore lesions. If the preclinical results translate successfully into humans, it could provide a highly lucrative treatment approach for this condition and create an additional commercial avenue beyond oncology. Question 10. Is Theralase still pursuing a United States listing and would it require a share consolidation? The company continues to evaluate United States financing and listing opportunities and is working with a full-service United States investment bank for strategic advice.

25:38 As discussed previously, management has identified a potential pathway that would not require a share consolidation. A successful United States listing could broaden Theralase's visibility in the world's largest capital market, expand access to specialized biotechnology and institutional investors, and potentially improving trade liquidity. No definitive transaction or timing has been announced, and any material development would be disclosed via press release in accordance with applicable securities laws. Question 11. How does Rivadar differentiate itself in bladder cancer?

26:25 Ruvadar's interim clinical data demonstrates encouraging efficacy, durability, and safety responses, such as a 65.2% complete response rate at any point in time, a 40.4% duration of complete response in patients that respond, and a 100% tertiary safety endpoint result. In the majority of cases, these results are obtained after a single procedure. To illustrate the durability of the response, Theralase has one patient who has demonstrated a complete response after a single procedure and has maintained that complete response for seven years and counting.

27:10 The localized single procedure approach is attractive for patients, clinicians, and insurance companies. Question 12. What non-dilutive funding sources are being considered? and why pursue a base-shelf prospectus and at-the-market program. The company continues to evaluate government grants, interest-free debt, and strategic collaborations that would reduce reliance on equity financing and allow the company to grow without additional stock dilution. A $100 million base-shelf prospectus has been successfully received by the OSC and an at-the-market program, once available, could provide measured financing flexibility around positive clinical and regulatory milestones.

28:02 Management remains mindful of dilution and will evaluate each financing alternative based on cost, timing, market conditions, and its potential to create long-term shareholder value. Question 13. What is the next step for Rutheran in the oncology pipeline? The next step in the commercialization pathway for Rutheran is GLP toxicology analysis, expected to be completed in the fourth quarter of 2026. This information will be used to calculate the maximum tolerated dose and the human equivalent dose. Subject to regulatory approval, this work is intended to support adaptive Phase 012 clinical studies in 2027 for various cancer indications.

28:56 Question 14. How will the company prioritize which new indications advance first? The current indications include glioblastoma multiforme, a deadly form of brain cancer, non-small cell lung cancer, Muscle Invasive Bladder Cancer, Pancreatic Cancer, Colorectal Cancer, and HSV-1. No final clinical sequence has been announced. Management intends to prioritize programs based on clinical data, competition in the disease space, unmet clinical need, feasibility, regulatory pathway, development cost, Partner interest and commercial potential.

29:45 The objective is to direct capital towards the programs with the clearest path to meaningful clinical impact and shareholder value. Question 15. Will Ruvadar be commercialized in-house or through partnerships? The company is evaluating multiple approaches, including geographic licensing for bladder cancer, Collaborative Research and broader NMIBC indications, and combinations with other approved drugs. Strategic partnerships can significantly extend geographic reach, accelerate development and market access, bring specialized commercial capabilities, and reduce the capital Theralase would otherwise need to deploy on its own. The ultimate structure may vary by territory and indication, with the objective of maximizing long-term shareholder value.

30:41 At the moment, licensing RUVIDAR for bladder cancer would be the most logical path forward, versus developing an expensive sales, marketing, and distribution network. Question 16. What is the shelf life and logistical advantage of RUVIDAR? Ruvadar has demonstrated a 10-year shelf life at room temperature. This is a meaningful product attribute that would simplify storage, inventory management, and distribution compared with therapies requiring complex preparation or ultra-cold storage. If approved, this stability profile could support broader clinical adoption and partnership interest.

31:26 Commercial logistics, labeling, and distribution requirements will remain subject to applicable regulatory approvals. Question 17. What does the updated durability data show, and what should investors expect from the final 12- and 24-month analyses? The reported 40.4% complete response rate at 450 days, representing 21 of 52 patients, and the 19.2% rates at both 2 and 3 years, representing 10 of 52 patients, use the full population currently available for durability at those time points. The Kaplan-Meier estimates are slightly different, as they are used to predict response based on the probability of remaining cancer-free once a complete response has been achieved and are currently 48.6%, 34.5%, and 25.4% at 1, 2, and 3 years, respectively.

32:37 The final durability of complete response will change slightly as follow-up matures. The long-duration responses observed to date remain particularly encouraging. Question 18. How does rolling review work once the submissions begin? Rolling reviews allow HealthCanon and the FDA the ability to commence reviewing completed portions of a submission as they become available instead of waiting for every module to be filed at once. This supports earlier regulatory engagement and a timelier response to a clinical submission. The company anticipates regulatory decisions in 2027, but the timing and outcome remain under the control of Health Canada and the FDA.

33:28 Question 19. What is the long-term strategic vision Thank you very much. The company's research suggests that Ruvidar and Rutheran may be activated or deployed in different ways across multiple indications, creating several potential development and partnering pathways from the core technology. Execution will require focused clinical and regulatory work, commercialization and licensing capabilities, access to capital, and experienced personnel.

34:22 As the balance sheet strengthens and the programs mature, management plans to build the corporate infrastructure and business development capabilities needed to support partnerships, licensing, and commercialization. That concludes all the questions that we have received to date that we are able to address. Thank you for your continued support and interest in Theralase.

34:50 Thank you Roger for your detailed responses, and thank you to all the shareholders for your thoughtful questions and continued engagement throughout today's discussion. With the balance sheet strengthened by our August life capital raise and Study 2 continuing to mature, the next chapter in the life of Theralase will focus on regulatory submissions and approval for the company's bladder cancer asset, launch of our Cohort 2, GLP Toxicology Analysis for Intravenous Rutheran and Topical Ruvidar, and Commencement of Phase 012 Clinical Studies for Numerous Medical Conditions. Thank you for your time today. A replay of this call will be available in due course on our website. Have a great day, stay safe, and thank you again for your continued support of Theralase.