DIAGNOCURE ANNOUNCES FOURTH QUARTER 2010 AND YEAR-END RESULTS

- Agreement on a shareholder rights plan -

QUEBEC CITY, Jan. 19 /CNW Telbec/ - DiagnoCure Inc. (TSX: CUR), a life sciences company commercializing high‐value cancer diagnostic tests and delivering lab services, today reported financial and operation results for the fourth quarter 2010 and fiscal year ended October 31, 2010. The Company announced a net loss of $1,141,903 or $0.03 per share for the fourth quarter ending October 31, 2010, and a net loss of $8,817,417 or $0.21 per share for the fiscal year 2010. These results are in line with Management expectations and reflect activities undertaken during the year according to the Company's plans and on-going commitment to develop high-value diagnostic tests for the detection and management of cancer. At the end of the quarter, cash, short-term investments and long-term investments stood at $6,904,241.

Shareholder Rights Plan

On January 19, 2011 DiagnoCure entered into a shareholder rights plan agreement to ensure, to the extent possible, that all shareholders of DiagnoCure are treated fairly in connection with any take-over bid for DiagnoCure. The rights plan was not adopted in response to any specific proposal or intention to acquire control of DiagnoCure. The rights plan has been approved by the Toronto Stock Exchange on December 20, 2010 and is conditional upon shareholder ratification at the annual and special meeting of shareholders of DiagnoCure, scheduled to be held on March 11, 2011.

Under the term of the plan, one right has been issued with respect to each common share of DiagnoCure issued and outstanding as of January 19, 2011 and one right will also be issued and will attach to each common share subsequently issued. These rights will become exercisable only when a person, including any party related to it, acquires or attempts to acquire 20 percent or more of DiagnoCure outstanding common shares without complying with the "Permitted Bid" provisions of the rights plan or without approval of DiagnoCure's Board of Directors. Should such an acquisition occur or be announced, each right would, upon exercise, entitle a rights holder, other than the acquiring person and related persons, to purchase common shares of DiagnoCure at a 50 percent discount to the market price at the time. Under the rights plan, a Permitted Bid is a bid which is made to all holders of the shares and which is open for acceptance for not less than 60 days.

A complete copy of the rights plan will be filed on SEDAR.

Highlights of the Fourth Quarter 2010

On September 21, 2010, an important milestone was met for the PCA3 test for prostate cancer as DiagnoCure's commercial partner, Gen-Probe Incorporated, filed a Premarket Approval Application (PMA) with the U.S. Food and Drug Administration (FDA) for its PROGENSA® PCA3 assay.

On August 3, 2010, DiagnoCure reported that the New York State Department of Health had issued a Clinical Laboratory Permit to its U.S. service laboratory, DiagnoCure Oncology Laboratories. The NY state permit completes the other licenses and accreditations received since 2008, which means the laboratory can now offer the PrevistageTM GCC test in all states in the U.S.

In late August, DiagnoCure has retained the services of JMP Securities LLC, to assist the Company in determining the best option to drive the growth of its U.S. based subsidiary, DiagnoCure Oncology Laboratories. One of these options may include investments from partnerships or investors. In working with JMP, DiagnoCure aims to determine the most effective method to roll out the Company's U.S. colorectal cancer disease management program to maximize the return on the investment in terms of long-term shareholder value. As of this date, this initiative is still ongoing.

Results for the fiscal year ended October 31, 2010

Total revenues for 2010 were $1,431,199 compared with $1,615,667 for 2009. In 2010, royalty revenues amounted to $645,067 compared with $528,480 for 2009. Royalty revenues from Gen-Probe increased by $151,165 or 34%, to $596,292 for 2010, from $445,127 for 2009. Without taking into account the effect of the exchange rate variation, royalty revenues from Gen-Probe have increased by 44%, to US$578,493 for 2010, from US$402,901 for 2009. This increase is mostly attributable to the sales of PROGENSA® PCA3 in Europe and PCA3 reagents in the United States by Gen-Probe. Also in 2010, DiagnoCure recorded royalties of $48,776 from Scimedx, related to ImmunoCytTM / uCyt+TM, compared with $83,353 for 2009. Direct sales of ImmunoCytTM / uCyt+TM by DiagnoCure were $44,827 for 2009. These 2009 ImmunoCytTM / uCyt+TM sales represent the last direct sales as Scimedx is now paying royalties to DiagnoCure. In 2009, DiagnoCure sold clinical samples to Gen-Probe to support their prostate cancer testing R&D for an amount of $56,099. There was no sale of clinical samples to Gen-Probe in 2010 since DiagnoCure sold the last clinical samples to Gen-Probe in the second quarter of 2009. Pursuant to the amendment agreement signed with Gen-Probe on April 29, 2009, DiagnoCure recorded an annual payment of $539,029 for 2010 compared with $440,127 for 2009. Also in 2010, DiagnoCure received reimbursement for its PrevistageTM GCC Colorectal Cancer Staging Test for an amount of $90,609 compared with $41,711 for 2009.

Interest income decreased by $346,646, to $156,492 for 2010 from $503,138 for 2009. The decrease is attributable to DiagnoCure's use of fund to finance its operating activities and to lower interest rates on its investments.

Cost of sales decreased by $3,279, to $51,006 for 2010, from $54,285 for 2009. The cost of sales of 2009 is related to ImmunoCytTM / uCyt+TM sales, to the samples sales to Gen-Probe and to the PrevistageTM GCC tests that were reimbursed. The cost of sales for this year represents only the cost related to the PrevistageTM GCC tests reimbursed.

Operating expenses, including stock based compensation, restructuring charges and incomes taxes, decreased by $3,976,759, to $10,449,678 for 2010, from $14,426,437 for 2009. This decrease reflects the impact of the enterprise structure optimization implemented in February 2010.

Based on the above, for 2010, DiagnoCure recorded a net loss of $8,817,417 or $0.21 per share, compared with $12,865,055 or $0.30 per share, for 2009. These results reflect activities undertaken during this year and on-going commitment to develop high-value diagnostic tests for the detection and management of cancer. These results also reflect the enterprise structure optimization implemented in February 2010, to ensure that the Company has sufficient cash resources to fund its research and development activities and to maintain its ongoing operations. At the end of this year, cash, short-term and long-term investments stood at $6,904,241, down from $14,554,889 as of October 31, 2009. This decrease of $7,650,648 is due to the use of liquidity to finance the operating activities for the year ended October 31, 2010.

Results of the Fourth Quarter 2010

Total revenues for the fourth quarter of 2010 were $368,707 compared with $351,924 for the fourth quarter of 2009. In the fourth quarter of 2010, royalty revenues amounted to $154,203 compared with $94,731 for the corresponding period of 2009. Royalty revenues from Gen-Probe increased by $63,781, to $126,110 for the fourth quarter of 2010, from $62,329 for the same quarter of 2009. This increase is mostly attributable to the sales of PROGENSA® PCA3 in Europe and PCA3 reagents in the United States by Gen-Probe. Also in the fourth quarter, royalties from Scimedx, related to ImmunoCytTM / uCyt+TM decreased to $28,094 for the fourth quarter of 2010, from $32,402 for the same quarter of 2009. As part of the amended agreement signed with Gen-Probe on April 29, 2009, DiagnoCure recorded a portion of the annual payment of $127,322, for the fourth quarter of 2010 compared with $145,960 for the fourth quarter of 2009. This decrease of $18,638 is only attributable to a difference in the exchange rate. Also, during the fourth quarter ended October 31, 2010, DiagnoCure received reimbursement for its PrevistageTM GCC Colorectal Cancer Staging Test for $61,232 compared with $14,769 for the fourth quarter of 2009.

Interest income decreased by $69,230, to $25,949 for the fourth quarter of 2010, from $95,179 for the same quarter of 2009. The decrease is attributable to DiagnoCure's use of fund to finance its operating activities and the lower interest rates on its investments.

Cost of sales increased by $24,663, to $33,143 for the fourth quarter of 2010, from $8,480 for the same quarter of 2009. This increase is attributable to the cost of sales related to the PrevistageTM GCC tests reimbursed.

Operating expenses, including stock based compensation, restructuring charges and incomes taxes, decreased by $1,293,927, to $1,729,535 for the fourth quarter of 2010, from $3,023,462 for the same quarter of 2009. This decrease reflects the impact of the enterprise structure optimization implemented in February 2010.

Based on the above, for the fourth quarter of 2010, DiagnoCure recorded a net loss of $1,141,903 or $0.03 per share, compared with $2,680,018 or $0.07 per share, for the same period of 2009. These results reflect the enterprise structure optimization implemented in February 2010, to ensure that the Company has sufficient cash resources to fund its research and development activities and to maintain its ongoing operations.

Financial data

For the periods of Three months ended
October 31
Years ended
October 31
2010 2009 2010 2009
Sales 61,232 16,054 90,609 143,922
Revenue under research and license agreement 281,526 240,691 1,184,098 968,607
Interest 25,949 95,179 156,492 503,138
Total revenues 368,707 351,924 1,431,199 1,615,667
Cost of sales 33,143 8,480 51,006 54,285
Gross margin 335,564 343,444 1,380,193 1,561,382
Operating expenses (before stock-based compensation, restructuring charges, and income taxes)   1,606,491 2,923,186 9,274,563 13,834,851
Net loss (before stock-based compensation, restructuring charges and income taxes) (1,270,927) (2,579,742) (7,894,370) (12,273,469)
Restructuring charges - - 716,028 -
Stock-based compensation 123,044 100,276 459,087 591,586
Future income taxes (252,068) - (252,068) -
Net loss (1,141,903) (2,680,018) (8,817,417)   (12,865,055)
Basic and diluted net loss per share (0.03) (0.07) (0.21) (0.30)
Weighted average number of common shares outstanding   42,976,140   42,952,171   42,968,755 42,849,592

Balance sheets

As of October 31 2010 2009
Cash, cash equivalents, temporary and long-term investments   6,904,241 14,554,889
Total assets 16,809,427 26,350,256
Shareholders' equity 14,877,497 23,224,245
Number of common shares outstanding    42,976,140    42,957,475

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., launched in 2008 the Previstage™ GCC Colorectal Cancer Staging Test, the first GCC-based molecular test for the management of colorectal cancer. A major study published in the February 18, 2009, edition of the Journal of the American Medical Association demonstrated that GCC, to which DiagnoCure owns exclusive worldwide diagnostic rights, is the strongest independent predictor of colorectal cancer recurrence. More clinical studies are underway to confirm the clinical utility of the Previstage™ GCC test. The Company 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 available through laboratories in the U.S. and in Canada using PCA3 analyte specific reagents (ASR) from Gen-Probe, and in Europe as the CE-marked PROGENSA® PCA3 in vitro assay. Gen-Probe completed a 500-patient clinical study aimed at securing FDA approval for the commercialization of the PROGENSA® PCA3 test in the U.S. and filed a PMA in September 2010. 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 unless required by the applicable securities laws and regulations.

SOURCE DIAGNOCURE INC.

For further information:

Investors    
DiagnoCure Inc.    
Chantal Miklosi     
Chief Financial Officer    
(418) 527-6100     
communications@diagnocure.com   
Media
DiagnoCure Inc.
Paule De Blois
Senior Vice President, Operations
(418) 527-6100
communications@diagnocure.com

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DIAGNOCURE INC.

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