Diagnocure announces fiscal 2007 second quarter results - Quarterly net loss down 29%



    Ticker Symbol: CUR

    QUEBEC CITY, June 6 /CNW Telbec/ - DiagnoCure Inc. (TSX: CUR), a leading
developer and provider of innovative high-value molecular diagnostic assays
for the detection and management of cancer, today announced its financial
results for the second quarter ended April 30, 2007.

    Highlights of the Quarter

    Gen-Probe, DiagnoCure's exclusive sub-licensee for diagnostic
applications of the PCA3 genetic marker, is now distributing analyte specific
reagents (ASR) for PCA3 in the U.S., and is selling its fully CE-marked
PROGENSA(TM) PCA3 in Europe. Major U.S. laboratories now selling PCA3-based
tests include; the Dianon unit of LabCorp with their CaPDetect:PCA3(TM) test,
Bostwick Laboratories with their PCA3 PCA3Plus(TM) test, and AmeriPath , with
their PCA3 ProfileR(TM) test.
    During the past quarter, the Company successfully completed a public
offering of 5,850,000 common shares at a price of $4.30 per common share, for
gross proceeds of $25,155,000. This bought deal financing was conducted
through a syndicate of underwriters, led by National Bank Financial Inc.,
including Orion Securities, Canaccord Adams Securities and Industrial Alliance
Securities.
    An interim analysis presented at the EAU (European Association of
Urologists) meeting in March 2007 concluded that Gen-Probe's PROGENSA(TM) PCA3
assay, currently commercialized in Europe, was better than free PSA at
predicting the result of the repeat biopsy. Researchers reported the PCA3 test
had a specificity of 73% in the study, compared to only 16% for free PSA
(prostate specific antigen). PCA3 was also prominently displayed at the recent
(May 2007) American Urology Association meeting, with two additional posters
and studies being presented. These studies further validate the potential of
the PCA3-based test to predict the outcome of a prostate biopsy, and provide
important findings, which will give clinicians more confidence that the PCA3
Score will be reliable.
    According to a study of 233 men published in the March issue of the
peer-reviewed journal UROLOGY(R) (69: 532-535, 2007), Gen-Probe's research
test for the genetic marker PCA3 in urine predicted the results of repeat
biopsies more accurately than traditional PSA testing.
    On April 30th, the Company strengthened its leading position in cancer
diagnostics by securing exclusive worldwide rights to two high-value molecular
tests for colorectal cancer and an option to a CLIA-certified U.S. service
laboratory to commercialize molecular cancer diagnostics tests. The two tests
for colorectal cancer in-licensed from Targeted Diagnostics &
Therapeutics, Inc. (TDT) of Philadelphia, PA, are based on the detection of
GCC (guanylyl cyclase C), a gene that appears normally in cells lining the
intestinal track, but has only been found outside the intestine when
colorectal cancer has metastasized. While the total value of the transaction
was not disclosed for competitive reasons, DiagnoCure's initial payment terms
include US$2.2 million in shares, each valued at CA$4.30. TDT will also
receive performance-based milestone payments and royalties on revenues
generated by the tests. More than 150,000 Americans are diagnosed with
colorectal cancer each year, with a post-surgery recurrence rate close to 50
percent. About 53,000 Americans die of the disease annually, making it the
second leading cause of cancer-related deaths.

    Results for the Second Quarter of Fiscal 2007

    Total revenues for the second quarter of 2007 were $1,232,559 compared
with $1,263,057 for the second quarter of 2006. Revenue recognition of the
continued calendar payments from Gen-Probe was $772,668 for the period, up
$33,561 from the prior year due to favourable changes in the U.S. to Canadian
foreign currency exchange rates. Sales of DiagnoCure's bladder cancer test,
ImmunoCyt(TM) / uCyt+(TM), were up $45,098 to $127,059 for the second quarter
of 2007 versus $81,961 for the same period a year ago. There were no sales of
uPM3(TM) by DiagnoCure in the second quarter of 2007. In mid 2006, DiagnoCure
has withdrawn its uPM3(TM) test from the market when Gen-Probe began to sell
their version of the PCA3 test. Sales of DiagnoCure developed uPM3(TM) ASR
prostate cancer test for the second quarter of 2006 were $183,711.
    Income from research and development contracts has increased in the
second quarter of 2007 by $72,918, attributable to a new R&D contract obtained
from Gen-Probe. Also in this quarter, DiagnoCure sold clinical samples to
Gen-Probe, in support of their prostate cancer testing R&D, for an amount of
$25,035 compared to $67,595 in 2006.
    Interest income increased $16,324 to $207,007 for the second quarter of
2007 compared to $190,683 for the second quarter of 2006. The increase is
attributable to the interest generated on the net proceed of $23,353,098
received from the April 2007 financing.
    Cost of sales decreased $115,358 from $179,882 for the second quarter of
2006 to $64,524 for the second quarter of 2007. This decrease is related to
lower actual product sales, as noted above, for uPM3(TM).
    Operating expenses from continuing operations, before stock-based
compensation, dropped from $2,423,298 for the second quarter of 2006 to
$1,930,852 for the same period in 2007, a decrease of $492,446 (20%)
reflecting cost savings from the restructuring initiated in late 2006. Total
operating expenses for the second quarter, including the non-cash charge for
stock-based compensation, were $2,358,127 compared with $2,688,389 in 2006, a
decrease of 12%.
    Based on the above, for the second quarter of 2007, DiagnoCure reduced
its recorded net loss for the quarter by $476,160 (29%), from $1,666,252 for
the second quarter of 2006 to $1,190,092 for the second quarter of 2007. The
net loss from continuing operations was $1,190,092 or $0.03 per share for the
second quarter of 2007, compared with $1,605,214, or $0.05 per share, for the
second quarter of 2006. These results are substantially in line with
management expectations and reflect steps undertaken during the past six
months to focus activities in line with the Company's plans and on-going
commitment to develop high-value tests for the detection and management of
cancer. At the end of the quarter, cash, short-term investments and long-term
investments stood at $39,190,161, up from $18,319,194 as at October 31, 2006.
This increase of $20,870,967 is attributable to the net proceeds of
$23,353,098 from the April 2007 financing. Management is satisfied that it has
adequate cash resources to execute its business plan in the near-term and
mid-term.

    
    Financial data

    -------------------------------------------------------------------------
    For the periods of        Three months ended          Six months ended
                                   April 30                    April 30
                         ----------------------------------------------------
                              2007          2006          2007        2006
    -------------------------------------------------------------------------
    Sales                  179,967       333,267       316,992     667,993
    -------------------------------------------------------------------------
    Revenue under
     research and
     license agreement     845,585       739,107     1,688,842   1,616,703
    -------------------------------------------------------------------------
    Interest               207,007       190,683       403,302     383,674
    -------------------------------------------------------------------------
    Total revenues       1,232,559     1,263,057     2,409,136   2,668,370
    -------------------------------------------------------------------------
    Cost of sales           64,524       179,882       148,986     368,863
    -------------------------------------------------------------------------
    Gross margin         1,168,035     1,083,175     2,260,150   2,299,507
    -------------------------------------------------------------------------
    Operating expenses
     (before stock-based
     compensation and
     restructuring
     charges)            1,930,852     2,423,298     4,112,537   5,002,437
    -------------------------------------------------------------------------
    Net loss (before
     stock-based
     compensation and
     restructuring
     charges)             (762,817)   (1,340,123)   (1,852,387) (2,702,930)
    -------------------------------------------------------------------------
    Restructuring
     charges                     -             -       912,685           -
    -------------------------------------------------------------------------
    Stock-based
     compensation          427,275       265,091       882,500     548,484
    -------------------------------------------------------------------------
    Net loss from
     continuing
     operations         (1,190,092)   (1,605,214)   (3,647,572) (3,251,414)
    -------------------------------------------------------------------------
    Net loss from
     discontinued
     operations                  -       (61,038)            -    (113,486)
    -------------------------------------------------------------------------
    Net loss            (1,190,092)   (1,666,252)   (3,647,572) (3,364,900)
    -------------------------------------------------------------------------
    Diluted net
     loss per
     share                   (0.03)        (0.05)        (0.10)      (0.10)
    -------------------------------------------------------------------------
    Weighted average
     number of common
     shares
     outstanding        36,493,714    34,372,585    35,461,293  34,365,301
    -------------------------------------------------------------------------


    Balance Sheet (Unaudited)
    As of April 30

    -------------------------------------------------------------------------
                                                         2007         2006
    -------------------------------------------------------------------------
    Total assets before discontinued operations    45,583,883   24,541,270
    -------------------------------------------------------------------------
    Assets related to discontinued operations               -      602,938
    -------------------------------------------------------------------------
    Total assets                                   45,583,883   25,144,208
    -------------------------------------------------------------------------
    Shareholders' equity                           40,422,159   22,592,089
    -------------------------------------------------------------------------
    Number of common shares outstanding            40,382,878   34,373,476
    -------------------------------------------------------------------------
    

    About DiagnoCure

    DiagnoCure specializes in the development, production and
commercialization of molecular diagnostics for the detection and management of
cancer. In 2003, the Company entered into a strategic alliance with Gen-Probe
(NASDAQ:   GPRO) for the development and commercialization of a
second-generation PCA3-based diagnostic test for prostate cancer. This test is
now available in the U.S. through laboratories using PCA3 analyte specific
reagents (ASR), as well as in Europe as the CE-marked Gen-Probe PROGENSA(TM)
PCA3 in vitro assay. In 2007, DiagnoCure acquired two tests for the staging
and monitoring of colorectal cancer based on the detection of the GCC gene.
The Company continues its own research and intends to acquire or in-license
additional promising cancer biomarkers from both academic and commercial
institutions. Additional information can be found at www.diagnocure.com.

    Forward-looking statements

    This release contains forward-looking statements that involve known and
unknown risks, uncertainties and assumptions that may cause actual results to
differ materially from those expected. By their very nature, forward-looking
statements are based on expectations and hypotheses and also involve risks and
uncertainties, known and unknown, many of which are beyond DiagnoCure's
control. As a result, investors are cautioned not to place undue reliance on
these forward-looking statements. The forward-looking statements regarding the
outcome of research and development projects, clinical studies and future
revenues are based on management expectations. In addition, the reader is
referred to the applicable general risks and uncertainties described in
DiagnoCure's most recent Annual Information Form under the heading "Risk
Factors". DiagnoCure undertakes no obligation to publicly update or revise any
forward-looking statements contained herein.
    %SEDAR: 00003671EF




For further information:

For further information: DiagnoCure Inc.: Thom Skinner, Chief Financial
Officer, (418) 527-6100, communications@diagnocure.com

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