Theralase heals at the speed of light

In the early 1990s, Roger Dumoulin-White’s father, a jeweller in Tillsonburg, ON, showed his son a prototype laser system that healed tissue.

“I was pretty sceptical,” Mr. Dumoulin-White remembers.  “It was something my father came across while traveling in Europe.  He also gave me an anecdotal study translated from Flemish that showed using 905 nanometre light, which is invisible laser light, increased cellular mitosis of fibroblasts by 100%.”

An electrical engineer by training and senior manager of Ford Motor’s electronics division in Canada, Mr. Dumoulin-White became intrigued at how light could have a direct impact on a biological system.

“I did about a year and a half of due diligence and in July of 1994, went to Brussels and met the inventor of the technology and talked to the scientists and doctors that he had worked with. After about three weeks, I bought the worldwide rights to the technology,” he recalls in an exclusive interview with biotuesdays.com.

“I came back to Toronto, resigned my position from Ford in August of 1994 and started Theralase Technologies (TSX-V:TLT) from a blank page.”

Today, Theralase has two technology platforms: therapeutic lasers used to heal muscular and skeletal pain and wounds, and an early-stage project using a bio-destructive laser, known as the TLC-3000, plus photodynamic compounds (PDCs) to destroy cancer, bacteria, virus and fat cells.  It also has an internal sales force and an outside sales force that works for a national sales manager.  Revenue this year is expected to reach $3.5 million, compared with $2.4 million in 2009, with the 2010 bottom line forecast to move into the black for the first time.

“We have some great technology and IT, and a significant upside based on our value proposition of today,” the Theralase CEO adds.

The company’s original TLC-1000 therapeutic medical laser has FDA and Health Canada approvals and the company expects to receive European approval later this month.  The technology is based on generating cold laser light in the 630 to 905 nanometre range to penetrate tissue up to a depth of four inches, where it stimulates mitochondria in cells to produce more energy and repair damaged tissue.  The benefits include a decrease or elimination of pain, reduced inflammation and faster wound healing, among other things.

Largely targeted to chiropractors, the TLC-1000 device, which sells for between $10,000 and $20,000, has been endorsed by professional athletes, as well as Dr. James Andrews of the American Sports Medicine Institute, who is also a member of Theralase’s medical and scientific advisory board.

“We can do a good business of about $5 million a year selling the TLC-1000 product.  But we’ve been working on developing a recurring revenue business model, where we would get paid on a monthly basis,” Mr. Dumoulin-White says.  “Hence, we have the TLC-2000 biofeedback laser.”

He explains that the new technology delivers an exact dose of energy to a targeted tissue location and structure, taking into account skin pigmentation, fat content and muscle content, and effectively “memorizing clinical protocols.”  As a result, medical practitioners can program the device and allow patients to treat themselves at home, resulting in a per-use revenue stream.

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The company is conducting clinical studies at the University of Buffalo to demonstrate the efficacy of its patented LTC-2000 laser in treating myofascial pain, with a launch date set for the first quarter of 2011.  “Our five-year target is to put 10,000 units on the market,” he predicts.  “So instead of charging $25,000 per device for this technology, we’re looking to charge more like $3,000-to-$5,000 upfront and then on a per use basis, generate about $500 per month per machine.  If we do that, the company will be pulling in $60 million a year in five years.”

Mr. Dumoulin-White says Theralase is poised for significant growth in the second half of 2010 and 2011 as it expands its sales and marketing efforts in the U.S. and internationally, and also prepares for the launch of the TLC‐2000.  Of the company’s nearly $2.5 million in revenue last year, about $2 million came from Canada, “so the opportunity for us is in the U.S. and international markets.”

Theralase has established a direct sales team working out of Toronto this year to target chiropractors, veterinarians and doctors in the five largest U.S. states – California, New York, Florida, Texas and Illinois – with its TLC-1000 and the TLC-2000 when it is launched.  The clinical trials in Buffalo could result in obtaining a Current Procedural Terminology code for reimbursement of laser treatments in the U.S., he points out.  “That would prevent competitors and medical practitioners from using that code.”

Some 50 million Americans suffer from chronic pain of tendons, joints, nerves and muscle, with a further six million people seeking relief from leg ulcers, bed sores and diabetic foot ulcers.

Theralase pegs the annual U.S. therapeutic laser market for chronic pain and wound healing at $30 million (U.S.), with forecasts suggesting the market will reach $150 million in five years.  “With our recurring revenue model, our goal is to gain a one-third share of the market in five years, or a top line of $50 million,” he predicts.

If the company’s bio-destructive TLC-3000 laser to treat cancer with PDCs obtains regulatory approval, Mr. Dumoulin-White figures a 1% market share could translate into annual revenues of $460 million for Theralase in five years.

Eight PDCs have been developed so far to target solid tumours in the breast, lung, brain and prostate, which are characterized as having low oxygen cores.  “Low-oxygen environments prove challenging for most other cancer therapies,” he adds.

Earlier this year, the company and the Ontario Cancer Institute at Princess Margaret Hospital in Toronto reported that the technology successfully destroyed breast cancer cells in-vitro.  A preclinical study with small animals is under way, looking for safety and efficacy, and dose rates of the compound and laser light.  The company also plans to study the technology in companion animals this year, with the goal of beginning discussions with the FDA about a Phase 1 human trial to start in mid-2011.

Since going public in 2003, the company has raised a mere $2 million from shareholders, preferring to fund product development costs of the TLC‐2000 and TLC-3000 lasers from existing product sales of the TLC-1000.  “Any money we obtain from shareholders is not going to pay my salary or keep the lights on,” he says.  “It’s going into the technology.”