DiagnoCure announces fiscal 2007 third quarter results



    Ticker Symbol: CUR

    QUEBEC CITY, Sept. 5 /CNW/ - DiagnoCure Inc. (TSX: CUR), a life sciences
company commercializing high-value cancer diagnostic tests and delivering lab
services, today announced its financial results for the third quarter ended
July 31, 2007.
    DiagnoCure recorded a net loss from operations of $2,188,454 or $0.05 per
share for the third quarter of 2007, compared with $1,614,018, or $0.04 per
share, for the third quarter of 2006 substantially in line with management
expectations. These results reflect the end of the revenue recognition from
the continued calendar payments received from Gen-Probe which had been
amortized over a 42-month period from the signing of the original license
agreement, and the activities undertaken during the past nine months to focus
activities in line with the Company's plans and on-going commitment to develop
and acquire tests for the detection and management of cancer. At the end of
the quarter, cash, short-term investments and long-term investments stood at
$35,941,052, up from $18,319,194 as at October 31, 2006. This increase of
$17,621,858 is attributable to the net proceeds of $23,353,098 from the
April 2007 financing. Net average monthly operating cash burn for the quarter
was $469,905. Management is satisfied that it has adequate cash resources to
execute its business plan in the near-term and mid-term.
    DiagnoCure also announced today that Mr. Thom Skinner, Chief Financial
Officer, has left the Company. "I would like to thank Mr. Skinner for his
extensive contributions to DiagnoCure over the years and wish him well in his
future endeavours," added Mr. Schafer.

    Highlights of the Quarter

    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 GC-C (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.
    "During the quarter, significant progress was made in the development of
our newly acquired GC-C test and we are on track for commercialization in
2008," said John Schafer, President and Chief Executive Officer of DiagnoCure.
    In May 2007, several research and laboratory-developed tests based on
DiagnoCure's PCA3, a genetic marker highly specific for prostate cancer, were
featured in presentations by scientists from Johns Hopkins University,
M.D. Anderson Cancer Center, Gen-Probe and others, and in four exhibits at the
meeting of the American Urological Association in Anaheim, California. This
was the second major international urology conference in 2007 where results
from PCA3 studies have been presented by key opinion leaders, raising the
visibility of PCA3.
    On August 1st, 2007, Gen-Probe, at its quarterly conference call,
announced a number of new developments related to PCA3. Most importantly was
their statement that the incremental clinical research data they have
collected over the last year or so has increased their conviction that a
standalone PCA3 assay satisfies an important unmet medical need and that the
specificity of their quantitative PCA3 test is a significant improvement over
the specificity of other tests, especially in the PSA dilemma population,
where men are often subjected to repeated, but ultimately unnecessary,
biopsies.
    To date, these findings relative to PCA3 have been described in more than
15 poster presentations at medical meetings and reported in two peer reviewed
publications. Gen-Probe has also indicated that there are four additional
manuscripts in process, many written with key opinion leaders from
M.D. Anderson, Johns Hopkins, UCLA, the University of Washington, and others.
DiagnoCure believes that the Gen-Probe PCA3 assay, even without the addition
of other molecular markers, could play an important role in the clinical
algorithm for diagnosing prostate cancer.
    Subsequent to the close of the third quarter, on August 16, 2007,
DiagnoCure announced it had acquired Catalyst Oncology of Worcester, MA, and
its lead proprietary prognostic tests for breast, colon and potentially other
cancers. Over the coming months, DiagnoCure intends to complete the
development of the tests and conduct additional validating clinical studies.
This acquisition reflects the continuing execution of DiagnoCure's focused M&A
strategy, aimed at building a critical mass of high-value oncology diagnostic
products that will be offered through the Company's U.S. CLIA-certified
laboratory, which is on track to open later this year. The newly acquired
tests have the potential to increase clinician and patient confidence when
making critical treatment decisions and will complement the GC-C-based tests
for colorectal cancer, acquired earlier this year.

    Results for the Third Quarter of Fiscal 2007

    Royalty revenues from Gen-Probe were $39,106 for the third quarter of
2007 compared to $5,464 for the third quarter of 2006. Sales of DiagnoCure's
bladder cancer test, ImmunoCyt(TM)/uCyt+(TM), were down $18,628 to $63,161 for
the third quarter of 2007 versus $81,789 for the same period a year ago. There
were no sales of uPM3(TM) by DiagnoCure in the third quarter of 2007. In mid
2006, DiagnoCure had withdrawn its uPM3(TM) test from the market when
Gen-Probe began to sell their version of the PCA3 test. Also in this quarter,
as Gen-Probe is nearing completion of their prostate cancer testing R&D,
DiagnoCure sold samples to Gen-Probe amounting to $3,430 compared with $62,586
in 2006.
    Total revenues for the third quarter of 2007 were $562,445 compared with
$1,170,947 for the third quarter of 2006. Revenue recognition of the continued
calendar payments and research agreement from Gen-Probe was $23,098 for the
period, down from $762,525 from the prior year. This decrease reflects the end
of the revenue recognition from the continued calendar payments received from
Gen-Probe which had been amortized over a 42-month period from the signing of
the original license agreement.
    Interest income increased to $433,649 for the third quarter of 2007
compared to $207,965 for the third 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 to $52,474 for the third quarter of 2007 from
$103,860 for the third quarter of 2006. This decrease is related to lower
actual product sales, as noted above, for uPM3(TM) and
ImmunoCyt(TM)/uCyt+(TM).
    Operating expenses from continuing operations, before stock-based
compensation, were relatively stable at $2,321,841 for the third quarter of
2007 compared with $2,304,135 for the same period in 2006. Total operating
expenses for the third quarter, including the non-cash charge for stock-based
compensation, were $2,698,425 compared with $2,588,941 in 2006.

    Financial data

    
    -------------------------------------------------------------------------
                              Three months ended         Nine months ended
    For the periods of             July 31                    July 31
                           --------------------------------------------------
                                 2007         2006         2007         2006
    -------------------------------------------------------------------------
    Sales                      66,591      171,895      338,634      839,888
    -------------------------------------------------------------------------
    Revenue under
     research and
     license agreement         62,205      791,087    1,795,996    2,407,790
    -------------------------------------------------------------------------
    Interest                  433,649      207,965      836,951      591,639
    -------------------------------------------------------------------------
    Total revenues            562,445    1,170,947    2,971,581    3,839,317
    -------------------------------------------------------------------------
    Cost of sales              52,474      103,860      195,819      472,723
    -------------------------------------------------------------------------
    Gross margin              509,971    1,067,087    2,775,762    3,366,594
    -------------------------------------------------------------------------
    Operating expenses
     (before stock-based
     compensation and
     restructuring
     charges)               2,321,841    2,304,135    6,440,019    7,306,572
    -------------------------------------------------------------------------
    Net loss (before
     stock-based
     compensation and
     restructuring
     charges)              (1,811,870)  (1,237,048)  (3,664,257)  (3,939,978)
    -------------------------------------------------------------------------
    Restructuring charges           -            -      912,685            -
    -------------------------------------------------------------------------
    Stock-based
     compensation             376,584      284,806    1,259,084      833,290
    -------------------------------------------------------------------------
    Net loss from
     continuing operations (2,188,454)  (1,521,854)  (5,836,026)  (4,773,268)
    -------------------------------------------------------------------------
    Net loss from
     discontinued
     operations                     -      (92,164)           -     (205,650)
    -------------------------------------------------------------------------
    Net loss               (2,188,454)  (1,614,018)  (5,836,026)  (4,978,918)
    -------------------------------------------------------------------------
    Diluted net loss
     per share                  (0.05)       (0.04)       (0.16)       (0.14)
    -------------------------------------------------------------------------
    Weighted average
     number of common
     shares outstanding    40,950,786   34,424,258   37,311,232   34,385,170
    -------------------------------------------------------------------------


    Balance Sheet (Unaudited)
    As of July 31

    -------------------------------------------------------------------------
                                                           2007         2006
    -------------------------------------------------------------------------
    Total assets before discontinued operations      42,937,956   22,719,580
    -------------------------------------------------------------------------
    Assets related to discontinued operations                 -      555,044
    -------------------------------------------------------------------------
    Total assets                                     42,937,956   23,274,624
    -------------------------------------------------------------------------
    Shareholders' equity                             41,052,289   21,312,643
    -------------------------------------------------------------------------
    Number of common shares outstanding              40,950,786   34,449,642
    -------------------------------------------------------------------------
    

    About DiagnoCure

    DiagnoCure (TSX: CUR) is a life sciences company commercializing
high-value cancer diagnostic tests and delivering lab services that increase
clinician and patient confidence in making critical treatment decisions.
DiagnoCure is currently preparing to launch the first GC-C-based molecular
test for the management of colorectal cancer. In 2003, the Company entered
into a strategic alliance with Gen-Probe (NASDAQ:   GPRO) for the development
and commercialization of a second-generation test for PCA3, DiagnoCure's
proprietary genetic marker highly specific to prostate cancer. The test is now
available through laboratories in the U.S. using PCA3 analyte specific
reagents (ASR) from Gen-Probe, and in Europe as the CE-marked PROGENSA(TM)
PCA3 in vitro assay. In addition to its own research, the Company intends to
acquire or in-license additional promising cancer biomarkers from both
academic and commercial institutions. For more information visit
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: The Equicom Group Inc.: Eric Bouchard, (514)
844-7997, ebouchard@equicomgroup.com

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