SQI Diagnostics Reports Fourth Quarter and Annual Financial Results
TORONTO, Jan. 28, 2014 /CNW/ - SQI Diagnostics Inc. (TSX-V: SQD), a life sciences company that develops and commercializes proprietary technologies and products for advanced microarray diagnostics, today announced its financial and operational results for the fourth quarter and year ended September 30, 2013.
Highlights for the fiscal year ended September 30, 2013
During the year-ended September 30, 2013, the Company entered into the following master service agreements in its Diagnostic Tools and Services business:
- Global Pharma 1 for the development and evaluation of an anti-drug-antibody ("ADA") assay to detect and quantify the immune response in four animal species to a new class of drug.
- Global Pharma 2 for the development of a 21 biomarker ADA assay to measure the immune responses during clinical trials to the customer's in-development biologic drug. Major development milestones have been achieved on this project.
- Global Pharma 2 also initiated an evaluation of the Company's 8-plex cytokine assay on the sqid-X platform. The evaluation is expected to be complete in the second fiscal quarter of 2014.
- Algorithme Pharma ("Algorithme") for the development of an assay targeted at immunogenicity testing of heparin and heparin-based low molecular weight biosimilar compounds ("HIT assay"). The proof-of-concept was developed and SQI and Algorithme began jointly marketing the shelf ready assay.
Management believes that successful delivery on the above noted proof-of-concept assays will result in the conversion of some or all of these customer agreements to commercial contracts for both the delivery of multiplexed test kits as well as SQI platforms leading to revenue generation in fiscal 2014. Algorithme and the Company continue to expand their co-marketing relationship and in 2014 the Company expects that one or more of its customers will outsource production of testing clinical samples using SQI's products to Algorithme.
Subsequent to the fiscal year end:
- Company entered into an agreement to develop a multiplexed ADA assay for Isis Pharma. Subsequent to the end of first quarter of fiscal 2014 the Company delivered on significant project milestones. The Company believes that successful evaluation of the prototype will lead to transfer to and adoption by Isis's CRO of the SQI-developed test in clinical testing and could result in material revenues.
- Also in the first quarter of 2014, the Company entered into a commercial product development agreement and Master Services Agreement with an Irvine California-based global pharmaceutical company (Global Pharma 3). Under the terms of the first contract SQI will be paid to develop a 6-plex anti-drug antibody assay.
- During the second fiscal quarter the Company completed external studies in the validation of its 4-plex, quantitative Celiac assay. The Company believes that it will complete and file its application for product approvals with various regulatory agencies during the current quarter.
"With the traction developing on our Diagnostics Tools and Services Business we believe significant progress is being made on our business model." said Andrew Morris, CEO of SQI Diagnostics. "We believe that the expected initiation of revenue-generating projects and the regulatory submission of additional Ig_plex products in fiscal 2014 will create additional commercial opportunities and success in the coming year."
Financing and Corporate Highlights:
- On May 2, 2013 the Company completed a non-brokered private placement of 5,126,044 units of the Company at $0.75 per unit for gross proceeds of $3,845,000. Each unit consists of one common share and one common share purchase warrant.
- On January 27, 2014 the Company completed a non-brokered private placement of 2,965,000 units of the Company at $0.50 per unit for gross proceeds of $1.483 million. Each unit consists of one common share and one common share purchase warrant. Each common share purchase warrant enables the holder to purchase one common share at a price of $0.65 for a period of two years.
The net loss for the year ended September 30, 2013 was $6,207,000 ($0.15 net loss per share) as compared to $6,311,000 ($0.17 net loss per share) for the year ended September 30, 2012. The net loss for the year ended September 30, 2013 is consistent with the loss for the year ended September 30, 2012 as the Company continued to focus on controlling cost while continuing its product development and expanding its customer pipeline.
Research and development (R&D) costs, excluding amortization, stock based compensation and the SR&ED Investment Tax Credit were $3,320,000 for the year ending September 30, 2013 compared to $3,561,000 for the year ending September 30, 2012. R&D expenditures, excluding amortization and stock based compensation for the quarter-ended September 30, 2013 were $792,000 compared to $819,000 for the quarter-ended September 30, 2012. R&D costs were lower for the year and quarter ended September 30, 2013 as a result of the Company's focus on advancing its Ig_plex celiac assay and on developing proof-of-concept assays for customers in the Diagnostics Tools and Services business. The collaboration agreements for the proof-of-concept assays have, in some cases, required these potential customers to provide certain reagents and antibodies, off-setting the Company's research and development costs. In fiscal 2012 the Company's focus was on IVD assays which required higher laboratory and validation costs.
Corporate and general expenses, excluding stock-based compensation, totaled $1,605,000 for the year ended September 30, 2013 compared to $1,801,000 for the year ended September 30, 2012. Corporate and general expenses, excluding stock-based compensation, totaled $371,000 for the three months ended September 30, 2013 compared to $501,000 for the year ended September 30, 2012. The decrease in corporate and general expenses is primarily related to reduced administrative salaries and professional fees.
Sales and marketing expenses, excluding stock based compensation, totaled $442,000 for the year ended September 30, 2013 compared to $273,000 for the year ended September 30, 2012. Sales and marketing expenses, excluding stock based compensation, totaled $143,000 for the three months ended September 30, 2013 compared to $92,000 for the three months ended September 30, 2012. The increase in sales and marketing expenses for the year and quarter ended September 30, 2013 compared to the year and quarter ended September 30, 2012 was primarily a result of increased expenditures on sales contractors, conferences, travelling and marketing as the Company focused on expanding its pipeline of Diagnostics Tools and Services customers.
At September 30, 2013, current assets were $1,724,000 compared to $4,208,000 at September 30, 2012. Working capital as at September 30, 2013 was $1,270,000 compared to $3,190,000 at September 30, 2012.
Detailed financial statements and the MD&A are available at www.sedar.com.
About SQI Diagnostics
SQI Diagnostics is a life sciences company that develops and commercializes proprietary technologies and products for advanced microarray diagnostics. The Company's proprietary microarray tests and fully-automated systems are designed to simplify protein and antibody testing workflow, increase throughput, reduce costs and provide excellent data quality. For more information, please visit www.sqidiagnostics.com.
This press release contains certain forward-looking statements, including, without limitation, statements containing the words "may", "plan", "will", "estimate", "continue", "anticipate", "intend", "expect", "believe", "in the process", "is subject to" and other similar expressions which constitute "forward-looking information" within the meaning of applicable securities laws. Forward-looking statements reflect the Company's current expectation and assumptions, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. These forward-looking statements involve risks and uncertainties including, but not limited to, our need for additional capital to sustain our business, statements with respect to sales of our IgX plex™ Celiac product and sqidworks, sqidlite and other analytical systems, agreements and future agreements to sell our products, the success of our Diagnostic Tools and Services business and our intent to build near-term revenue streams from this business, the build-out of our portfolio of quantitative tests, the successful regulatory filing and receipt of regulatory approvals for our later stage quantitative diagnostic kits, the acceleration of our revenue ramp, general economic and market segment conditions, competitor activity, technology changes and regulatory approvals. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks and uncertainties and other risks detailed from time-to-time in the Company's ongoing filings with the securities regulatory authorities, which filings can be found at www.sedar.com. Actual results, events, and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements either as a result of new information, future events or otherwise, except as required by applicable securities laws.
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SOURCE SQI Diagnostics IncFor further information:
Director of Finance
416.674.9500 ext. 277
Chief Executive Officer
416.674.9500 ext. 229