DiagnoCure announces third quarter 2008 results



    Previstage(TM) GCC test recently launched and now available

    QUEBEC CITY, Sept. 8 /CNW Telbec/ - DiagnoCure Inc. (TSX: CUR), a life
sciences company commercializing high-value cancer diagnostic tests and
delivering lab services, today reported financial and operating results for
the third quarter ended July 31, 2008. The Company announced a net loss of
$4,207,974 or $0.10 per share for the third quarter ending July 31, 2008.
These results are substantially in line with Management expectations and
reflect the pre-marketing and final development activities that led to the
launch of the Previstage(TM) GCC test in late August. At the end of the
quarter, cash, short-term and long-term investments stood at $23,384,513.
    "Our sales team is now actively promoting the Previstage(TM) GCC test to
clinicians across the United States", stated John Schafer, President and CEO
of DiagnoCure. "We are also very pleased by the European sales performance of
PCA3. Gen-Probe, our partner in the development and commercialization of this
test, recently announced that their European sales of PCA3 are now exceeding
the sales in the United States. This clearly shows that Gen-Probe has
implemented strong marketing efforts in Europe, where PCA3 has received full
regulatory approval that allows Gen-Probe to actively promote the test in that
part of the world. Altogether, this is a great time for DiagnoCure".

    Highlights of the Quarter

    Previstage(TM) GCC test

    In May, at the American Society of Clinical Oncology (ASCO) annual
meeting in Chicago, attended by 30,000 health practitioners concerned with
cancer, DiagnoCure introduced Previstage(TM) GCC, a molecular diagnostic
solution for the need to more accurate staging of colorectal cancer. This
major milestone allowed the Company to educate the oncology community about
the potential of Previstage(TM) GCC. ASCO also featured a number of important
studies about colorectal cancer, including one from Dr. Scott Waldman, from
the Thomas Jefferson University, who conducted a prospective, 5-year
NIH-sponsored study on GCC; Dr. Waldman presented his discovery and clinical
implications of the GCC marker. Key opinion leaders from the colorectal cancer
treatment community expressed interest in the Company's Previstage(TM)
GCC test and Dr. Waldman's presentation.
    In June, DiagnoCure gave presentations at important meetings in the
United States on its GCC testing research and on the beneficial role of GCC in
the staging of colorectal cancer to the medical community.
    On August 4, DiagnoCure announced that four prominent colorectal cancer
key opinion leaders had agreed to serve on the Strategic Advisory Board of its
wholly-owned subsidiary, DiagnoCure Oncology Laboratories. The mandate of
these renowned specialists consists of advising the Company on issues related
to the Previstage(TM) GCC test and the Company's commercialization efforts.
    During the quarter, DiagnoCure Oncology Laboratories completed the
development and validation of Previstage(TM) GCC. On August 26, the Company
announced that it had received approval from the U.S. regulatory authorities
with the specific CLIA certification required to launch Previstage(TM) GCC.
The test is now offered and promoted directly to clinicians across the United
States. Previstage(TM) GCC provides clinicians significantly more accurate
information for staging a patient with colorectal cancer that increases their
confidence in making critical treatment decisions.

    PCA3 testing

    In May, the PCA3 test was a subject of several key presentations and
three exhibits at the meeting of the American Urological Association (AUA) in
Orlando, Florida, attended by urologists from around the world. Gen-Probe
featured the test in its exhibition booth, and Dianon (LabCorp) and AmeriPath
(Quest) had their versions of the PCA3 test, using Gen-Probe's analyte
specific reagents, prominently featured as well. Dr. Yves Fradet, Founder and
Chief Medical Officer of DiagnoCure, presented the latest clinical information
on PCA3 to an audience of an estimated 10,000 attendees.
    The value and performance of the PCA3 test were once again featured in
one important article published in May in the Journal of Urology. This article
concluded that PCA3 scores correlate with both tumor volumes and prostatectomy
Gleason scores, both of which are measures of prostate cancer aggressiveness.
As a result, researchers suggested that PCA3 may have clinical applicability
in identifying men who have low-volume or low-grade prostate cancer and who
could be followed with active surveillance instead of requiring immediate
treatment. This article received significant high visibility press coverage in
the United States and in Europe, and the study may further increase the market
potential of PCA3.
    In its June edition, the European Urology Journal published an article on
the clinical utility of the PCA3 urine test in repeated biopsy cases. This
European study in men with one or two previous negative biopsies indicated
that the PCA3 assay may aid in deciding which patients need a repeat biopsy.
An increasing PCA3 score corresponds with an increasing probability of a
positive repeat biopsy. Additionally, the PCA3 score had greater diagnostic
accuracy than PSA for predicting repeat prostate biopsy outcome, even at a
sensitivity of 80-90 %. The utility of the PCA3 score was independent of the
number of previous biopsies, prostate volume, and total PSA. The PCA3 score
may also be indicative of the aggressiveness of prostate cancer.
    In their second quarter conference call on July 31, Gen-Probe, to which
DiagnoCure licensed its PCA3 marker in 2003, announced that the PCA3 test
sales in Europe are now exceeding sales in the U.S. This reflects Gen-Probe's
ability to actively promote PCA3 in Europe where they have obtained in 2006
the necessary regulatory approval for commercialization. Such approval has yet
to be obtained in the U.S.

    ImmunoCyt(TM)/uCyt+(TM) test

    As DiagnoCure looked to maximize the value of its portfolio and focus on
high-value molecular diagnostics, the Company actively sought out a partner
that would efficiently commercialize ImmunoCyt(TM)/uCyt+(TM), its bladder
cancer test. In July, DiagnoCure entered into a product divestment agreement
for ImmunoCyt(TM)/uCyt+(TM) with U.S.-based Scimedx Corporation. Terms of the
agreement were not disclosed.

    Results for the third quarter ended July 31, 2008

    Total revenues for the third quarter of 2008 were $486,074 compared with
$562,445 for the third quarter of 2007. This decrease of $76,371 is mostly
attributable to the decrease in the interest revenue for the quarter. Royalty
revenues from Gen-Probe increase in the third quarter of 2008 to $64,239,
compared to $39,106 for the third quarter of 2007. Sales of DiagnoCure's
non-invasive bladder cancer test, ImmunoCyt(TM) / uCyt+(TM), were $111,754 for
the third quarter of 2008 versus $63,161 for the same period a year ago.
Income from research and development contracts, predominantly with Gen-Probe,
has decreased in 2008 by $23,099 as specific PCA3-related contracted R&D
projects are completed. Also in this quarter, DiagnoCure sold clinical samples
to Gen-Probe, in support of their prostate cancer testing R&D, for an amount
of $39,179 compared with $3,430 in the third quarter of 2007.
    Interest income decreased by $162,747, to $270,902 for the third quarter
of 2008 compared with $433,649 for the third quarter of 2007. The decrease is
attributable to the use of fund to finance the operating activities and the
reduction of interest levels in DiagnoCure's investments.
    Cost of sales increased by $35,067, from $52,474 for the third quarter of
2007 to $87,541 for the third quarter of 2008. This increase is related to
higher samples and ImmunoCyt(TM) / uCyt+(TM) sales. Research and development
expenses, net of investment tax credits, increased by $1,261,853, from
$716,478 for the third quarter of 2007 to $1,978,331 for the same quarter in
2008. The increase in research and development expenses is attributable to the
development and transfer, to our U.S. laboratory, of the GCC colorectal cancer
staging test.
    Based on the above, for the third quarter of 2008, DiagnoCure recorded a
net loss of $4,207,974 or $0.10 per share, compared with $2,188,454, or
$0.05 per share, for the third quarter of 2007. These results are
substantially in line with Management expectations and reflect the
pre-marketing and final development activities that led to the launch of the
Previstage(TM) GCC test in late August 2008.

    
    Financial data

    -------------------------------------------------------------------------
                              Three months ended           Nine months ended
    For the periods of              July 31                     July 31
                         ----------------------------------------------------
                              2008          2007          2008          2007
    -------------------------------------------------------------------------
    Sales                  150,933        66,591       400,721       338,634
    -------------------------------------------------------------------------
    Revenue under research
     and license agreement  64,239        62,205       151,617     1,795,996
    -------------------------------------------------------------------------
    Interest               270,902       433,649       941,300       836,951
    -------------------------------------------------------------------------
    Total revenues         486,074       562,445     1,493,638     2,971,581
    -------------------------------------------------------------------------
    Cost of sales           87,541        52,474       244,081       195,819
    -------------------------------------------------------------------------
    Gross margin           398,533       509,971     1,249,557     2,775,762
    -------------------------------------------------------------------------
    Operating expenses
     (before stock-based
     compensation and
     restructuring
     charges)            4,289,735     2,321,841    10,589,744     6,440,019
    -------------------------------------------------------------------------
    Net loss (before
     stock-based
     compensation and
     restructuring
     charges)           (3,891,202)   (1,811,870)   (9,340,187)   (3,664,257)
    -------------------------------------------------------------------------
    Restructuring
     charges                     -             -             -       912,685
    -------------------------------------------------------------------------
    Stock-based
     compensation          316,772       376,584       925,470     1,259,084
    -------------------------------------------------------------------------
    Net loss            (4,207,974)   (2,188,454)  (10,265,657)   (5,836,026)
    -------------------------------------------------------------------------
    Basic and diluted
     net loss per share      (0.10)        (0.05)        (0.24)        (0.16)
    -------------------------------------------------------------------------
    Weighted average
     number of
     common shares
     outstanding        42,792,445    40,950,786    42,096,998    37,311,232
    -------------------------------------------------------------------------


    Balance Sheet (Unaudited)
    As of July 31

    -------------------------------------------------------------------------
                                                          2008          2007
    -------------------------------------------------------------------------
    Cash, cash equivalents, temporary and long-term
     investments                                    23,384,513    35,941,052
    -------------------------------------------------------------------------
    Total assets                                    36,996,019    42,937,956
    -------------------------------------------------------------------------
    Shareholders' equity                            33,013,201    41,052,289
    -------------------------------------------------------------------------
    Number of common shares outstanding             42,792,475    40,950,786
    -------------------------------------------------------------------------
    

    About DiagnoCure

    DiagnoCure (TSX: CUR) is a life sciences company commercializing
high-value cancer diagnostic tests and delivering laboratory services that
increase clinician and patient confidence in making critical treatment
decisions. DiagnoCure Oncology Laboratories, a subsidiary of DiagnoCure Inc.,
recently launched the Previstage(TM) GCC Colorectal Cancer Staging Test, the
first GCC-based molecular test for the management of colorectal cancer. The
Company also has a strategic alliance with Gen-Probe (NASDAQ:   GPRO) for the
development and commercialization of a second-generation prostate cancer test
using PCA3, DiagnoCure's proprietary molecular marker. This test is also
available through laboratories in the U.S. using PCA3 analyte specific
reagents (ASR) from Gen-Probe, in Europe as the CE-marked PROGENSA(TM) PCA3 in
vitro assay, and in Canada. 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: Investors: J.F. Bureau, CFA, Sr. Vice President
and CFO, DiagnoCure Inc., (418) 527-6100, communications@diagnocure.com;
Media: Jean-Pierre Trudel, Jean-Pierre Trudel & Associates, (514) 347-6111,
jp.trudel@videotron.ca

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