Spectral Announces Third Quarter 2013 Results

TORONTO, Nov. 13, 2013 /CNW/ - Spectral Diagnostics Inc., (TSX:SDI) (OTCQX: DIAGF), a Phase III company developing the first theranostic treatment for patients with severe sepis and septic shock, today announced its unaudited financial results for the third quarter ended September 30, 2013.

Third Quarter Highlights:

  • Continued to enroll patients into the Company's Phase III EUPHRATES trial at an accelerated rate. Directed by the Company's Endotoxin Activity Assay (EAA™), which is the only FDA-cleared diagnostic for the risk of developing sepsis, Spectral's EUPHRATES trial, as currently configured, is targeted to enroll 306 evaluable patients in North America. At current enrollment rates, these patients would be enrolled by the end of the second quarter of 2014.

  • Announced that the 184 patients required for the trial's planned, second interim analysis have been randomized. The 184 patients have now been followed for 28 days and all data is in the process of being gathered and analyzed. The Data and Safety Monitoring Board (DSMB) will review the data and the overall progress of the trial and advise Spectral on the trial's safety, futility and efficacy, with stopping rules in place for efficacy.

  • Disclosed that the composite 28-day mortality rate of 33 percent for randomized patients in the trial continues to suggest that the trial is enrolling patients who are at greatest risk for a poor medical outcome and, therefore, would most likely benefit from the Company's theranostic treatment.

  • As of November 12, 2013, 206 patients had been randomized into Spectral's EUPHRATES trial.

"We continued to enroll patients at an accelerated rate during the quarter." stated Dr. Paul Walker, President and CEO of Spectral. "We are very excited about learning the upcoming results of our data-rich, planned second interim analysis because we believe they should support the successful completion of the trial."

Spectral remains on track to disclose information from the second interim analysis in early 2014.

The second interim analysis will include, if needed, a sample size recalculation which will be based on the observed clinical trial data so far and will set a sample size that is required to attain a statistically and clinically significant difference in the mortality between the treated and placebo groups. This sample size recalculation, if needed, will also determine the expected timing for trial completion.

Financial Review

Revenue for the three months ended September 30, 2013 was $679,000, compared to $667,000 for the same period in the preceding year. For the nine months ended September 30, 2013 revenue was $1,959,000 compared to $1,942,000 for the same period in 2012.

Total expenses for the three months ended September 30, 2013 were $3,217,000 compared to $2,787,000 in the third quarter of 2012. For the nine months ended September 30, 2013 total expenses were $9,666,000 compared to $8,561,000 for the same prior-year period. This increase of $1,105,000 for the nine months ended September 30, 2013 is directly attributable to the higher EUPHRATES trial costs of $1,845,000 mitigated by a $648,000 decrease in management services fees and other operating costs.

The Company continues to maintain a low-cost operating structure and expects no material increase in non clinical operating costs for the remainder of 2013.

For the quarter ended September 30, 2013, the Company reported a loss of $2,517,000 compared to a loss of $2,077,000 for the corresponding period in 2012. For the nine months ended September 30, 2013, Spectral reported a loss of $7,634,000 compared to $6,476,000 for the same period in 2012. The Company's loss was greater for the three and nine months of 2013 primarily due to higher costs for its EUPHRATES trial.

Spectral concluded the third quarter of 2013 with cash, cash equivalents and short-term investment of $9,044,000 compared to $10,562,000 as at December 31, 2012. Subsequent to the quarter end, the Company received $585,000 cash on the exercise of 1,462,500  share purchase warrants at an exercise price of $0.40 per  common share.

The total number of shares outstanding for the Company was 133,000,061 as at September 30, 2013.

About Spectral Diagnostics

Spectral is a Phase III company seeking U.S. FDA approval for its lead theranostics product for the treatment of severe sepsis with septic shock. Toraymyxin is a therapeutic hemoperfusion device that removes endotoxin, which can cause sepsis, from the bloodstream. Directed by the Company's Endotoxin Activity Assay (EAA™), the only FDA cleared diagnostic for the risk of developing sepsis. Spectral's EUPHRATES trial is the world's only active and most innovative Phase III study in the area of septic shock.

Toraymyxin has been approved for therapeutic use in Japan and Europe, and has been used safely and effectively on more than 100,000 patients to date. In March 2009, Spectral obtained the exclusive development and commercial rights in the U.S. for Toraymyxin, and in November 2010, signed an exclusive distribution agreement for this product in Canada. Approximately 350,000 patients are diagnosed with severe sepsis and septic shock in North America each year, representing a greater than $1 billion market opportunity for Spectral. Spectral is listed on the Toronto Stock Exchange under the symbol SDI, and on the OTCQX under the symbol DIAGF. For more information please visit www.spectraldx.com

Forward-looking statement

Information in this news release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Implicit in this information, particularly in respect of the future outlook of Spectral and anticipated events or results, are assumptions based on beliefs of Spectral's senior management as well as information currently available to it. While these assumptions were considered reasonable by Spectral at the time of preparation, they may prove to be incorrect. Readers are cautioned that actual results are subject to a number of risks and uncertainties, including the availability of funds and resources to pursue R&D projects, the successful and timely completion of clinical studies, the ability of Spectral to take advantage of business opportunities in the biomedical industry, the granting of necessary approvals by regulatory authorities as well as general economic, market and business conditions, and could differ materially from what is currently expected.

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this statement.

Spectral Diagnostics Inc.
Condensed Interim Statement of Financial Position
         
(in thousands of Canadian dollars)
         
    September 30
2013
  December 31
2012
    $   $
    Unaudited   Audited
Assets        
Current assets        
Cash and cash equivalents   3,855   5,425
Short-term investment   5,189   5,137
Trade and other receivables   510   590
Inventories   357   277
Prepayments   305   226
    10,216   11,655
Non-current assets        
Property, plant and equipment   620   497
Intangible assets   416   434
    1,036   931
         
Total assets   11,252   12,586
         
Liabilities        
Current liabilities        
Trade and other  payables   2,527   1,913
Deferred revenue   25   99
Total liabilities   2,552   2,012
         
Equity        
Share capital   32,692   27,101
Contributed surplus   3,864   3,864
Other equity reserves   8,429   8,260
Deficit   (36,285)   (28,651)
Total equity   8,700   10,574
         
Total liabilities and equity   11,252   12,586


Spectral Diagnostics Inc.
Condensed Interim Statement of Loss and Comprehensive Loss
For the nine months ended September, 2013 and 2012
(Unaudited)
 
(in thousands of Canadian dollars, except for share and per share data)
         
    Three months ended    Nine months ended
    September 30   September 30
    2013 2012   2013 2012
    $ $   $ $
             
Revenue   679 667   1,959 1,942
               
Other income   5 25   24 91
             
Expenses            
Changes in inventories of finished goods and
    work- in-process
  114 64   235 208
Raw materials and consumables used   133 135   414 344
Employee benefits   719 598   2,173 2,004
Consulting and professional fees   1,793 1,352   4,971 3,598
Management services   - 173   275 923
Regulatory and investor relations   48 112   154 334
Travel and entertainment   228 153   898 612
Depreciation and amortization   62 57   176 163
Foreign exchange (gain)loss   4 16   4 20
Other expenses   116 127   366 355
    3,217 2,787   9,666 8,561
             
Operating loss   (2,533) (2,095)   (7,683) (6,528)
             
Finance  income   16 18   49 52
             
Loss and comprehensive loss for the period   (2,517) (2,077)   (7,634) (6,476)
             
             
Basic and diluted loss per common share   (0.02) (0.02)   (0.06) (0.06)
             
Weighted average number of common shares
    outstanding
           
132,669,898 113,883,394   126,299,847 113,883,394


Spectral Diagnostics Inc.
Condensed Interim Statement of Changes in Equity
(Unaudited)
 
(in thousands of Canadian dollars, except number of shares)
               
    Issued capital Contributed
surplus
Share-based
compensation
Warrants Deficit Total equity
    Number $ $ $ $ $ $
Balance, January 1, 2012    113,883,394 27,101 3,864 2,939 5,143 (20,108) 18,939
Loss and comprehensive loss for
     the period
  - - - - - (6,476) (6,476)
Share-based compensation   - - - 150 - - 150
Balance, September 30, 2012   113,883,394 27,101 3,864 3,089 5,143 (26,584) 12,613
                 
Balance, January 1, 2013    113,883,394 27,101 3,864 3,117 5,143 (28,651) 10,574
Loss and comprehensive loss for
     the period
  - - - - - (7,634) (7,634)
Private placement   18,666,667 5,455 - - - - 5,455
Share options exercised   450,000 136         136
Share-based compensation   - - - 169 - - 169
Balance, September 30, 2013   133,000,061 32,692 3,864 3,286 5,143 (36,285) 8,700


Spectral Diagnostics Inc.
Condensed Interim Statement of Cash Flows
For the nine months ended September 30, 2013 and 2012
(Unaudited)
 
(in thousands of Canadian dollars, except for share and per share data)
     
    Nine months ended
    September 30   September 30
    2013   2012
    $   $
Cash flow provided by (used in)        
         
Operating activities        
Loss and comprehensive loss for the period   (7,634)   (6,476)
Adjustments for:        
  Depreciation on property, plant, and equipment   158   145
  Amortization of intangible assets   18   18
  Share-based compensation   169   150
Changes in items of working capital :        
  Trade and other  receivables   80   (96)
  Inventories   (80)   82
  Prepayments   (79)   245
  Trade and other payables   614   (103)
  Deferred revenue   (74)   (76)
Net cash used in operating activities   (6,828)   (6,111)
         
Investing activities        
Property, plant and equipment expenditures   (281)   (214)
Redemption of short-term investment   5,137   5,086
Purchase of short-term investment   (5,189)   (5,137)
Net cash used in investing activities   (333)   (265)
         
Financing activities        
Private placement   5,455   -
Share options exercised   136   -
Net cash provided by financing activities   5,591   -
         
Increase(decrease) in cash and cash equivalents   (1,570)   (6,376)
         
Cash and cash equivalents, beginning of period   5,425   13,470
Cash and cash equivalents, end of period   3,855   7,094

 

 

SOURCE: Spectral Diagnostics Inc.

For further information:

Anthony Businskas
Executive Vice President and CFO
Spectral Diagnostics Inc.
416-626-3233 ext. 2200
tbusinskas@spectraldx.com

Adam Peeler
Investor Relations
TMX Equicom
416-815-0700 ext. 225
apeeler@tmxequicom.com

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