GeneNews Reports Fourth Quarter and 2009 Annual Results
TORONTO, March 15 /CNW/ - GeneNews Limited (TSX: GEN), an emerging molecular diagnostics company focused on the application of functional genomics to enable early diagnosis and personalized health management, today reported operational and financial results for the year ended December 31, 2009.
Highlights for 2009:
- Granted a U.S. patent for the Company's core platform technology, the
Sentinel Principle(R), a powerful method for identifying clinically
actionable biomarkers relating to disease and health from a basic
blood sample.
- Publication of positive validation data in the International Journal
of Cancer for a novel blood-based, seven-gene biomarker panel for
colorectal cancer that can stratify average risk patients according to
their current relative risk of actually having colorectal cancer, the
basis of the Company's lead product ColonSentry(TM).
- Publication of a paper in the Journal of Clinical Gastroenterology
reporting data using GeneNews' core Sentinel Principle(R) platform
technology to identify complex changes in blood gene expression
patterns that were differentially regulated between active and
inactive Crohn's disease.
- Obtained a commitment of MYR 5 million (CDN$1.53 million) from the
Malaysian Ministry of Health for the development of diagnostic tests
for liver cancer and hepatitis based on the Company's core Sentinel
Principle(R) platform technology.
- Entered into an agreement allowing Eli Lilly and Company (NYSE: LLY)
select access to clinical data from GeneNews' osteoarthritis genomic
biomarker program.
- Appointed Dr. David Sable, a portfolio manager at New York-based
Special Situations Funds, to the GeneNews Board of Directors.
- Strengthened the Company's balance sheet by completing two non-
brokered common share private placements for total gross proceeds in
the amount of approximately $4.3 million and two tranches of a
convertible debenture placement for gross proceeds of approximately
$2.2 million.
Outlook for 2010
The Company anticipates the achievement of the following milestones in
2010:
- The commercial launch of ColonSentry(TM) in New York and New Jersey by
GeneNews' exclusive partner for these U.S. states, Enzo Clinical Labs.
- The engagement of additional partners to establish a global
ColonSentry(TM) marketing and distribution network that will make this
lead product available to patients in Europe, China, Malaysia, and
regions of the United States not covered by GeneNews' current
agreement with Enzo.
- The initiation of additional clinical and economic studies to support
the pursuit of public and private health insurance reimbursement for
ColonSentry(TM).
- Expanded adoption and use of ColonSentry(TM) in Canada.
- Additional patent issuances to expand the scope of protection for the
Company's Sentinel Principle(R) platform technology to include all
aspects of personalized health management from early detection, to
determining response, to treatment, and to protect the use of
biomarkers derived from the application of the Sentinel Principle(R)
to specific clinical applications.
- Partnering to advance further development of GeneNews' pipeline of
molecular products based upon the Sentinel Principle(R).
- Expansion of the Company's shareholder base and access to additional
working capital to support the pursuit of its milestones.
"We went into 2009 confident that our focus on the refinement and initial execution of our global ColonSentry(TM) commercialization plan would generate improved operational and financial performance throughout the year," said Gailina Liew, President and Chief Operating Officer. "Our 2009 achievements demonstrate the success of that focus. Now, as we move through 2010, our primary goal will be to drive awareness and clinical adoption of ColonSentry(TM) as a cost-effective and patient-friendly first step to facilitate greater adherence to colorectal cancer screening guidelines."
"GeneNews' position as an emerging leader in the fields of molecular diagnostics and personalized health management is well protected by the expanding patent position of its disruptive Sentinel Principle(R) technology platform. We expect this leadership position, combined with continued strong management execution, will result in the realization of additional quality commercialization opportunities in 2010," added Dr. Heiner Dreismann, Lead Director and interim CEO.
In February 2010, a second US patent protecting the application of blood biomarkers identified by the Company's core Sentinel Principle(R) platform technology to any health management context was granted.
Financial results for the fourth quarter and year-ended December 31, 2009:
For the three months ended December 31, 2009, the Company reported a consolidated net loss of $463,654, or $0.00 loss per common share, as compared to a consolidated net loss of $2,673,688, or $0.05 loss per common share for the three months ended December 31, 2008. For the year ended December 31, 2009, the Company reported a consolidated net loss of $5,593,869 or $0.09 loss per common share, as compared to a consolidated net loss of $13,171,503 or $0.24 loss per common share for the year ended December 31, 2008. This improved financial performance is primarily due to a 76% reduction in research and development costs that resulted from reductions in the number of scientific and technical staff needed to support the Company's research and development activities through its Canadian operations and significant reductions in direct program costs associated with the ColonSentry(TM) sampling program that was completed in the fourth quarter of 2008.
As at December 31, 2009, the Company's unrestricted cash and cash equivalents and cash held in trust amounted to $2.8 million as compared with $1.4 million as at December 31, 2008. Since the fourth quarter of 2008, the Company has taken measures to conserve cash and has substantially reduced the overall use of capital in the near term. Even with these measures in place, the Company's cash and cash equivalents and cash held in trust are only sufficient to support the Company's activities into the fourth quarter of 2010. The Company is in discussions with several potential strategic partners to obtain additional operating capital and provide access to additional commercialization capabilities. The Company has also engaged financial advisors to assist the Company to raise further funds.
The Company had 69,027,881 common shares, 9,171,463 stock options and 13,009,372 warrants outstanding as at December 31, 2009.
The Company's annual financial statements and management's discussion and analysis are available on www.sedar.com.
Notice of Annual General Meeting:
GeneNews will hold its Annual Shareholder Meeting at 4:30pm on May 3, 2010 at the offices of Fasken Martineau DuMoulin LLP located at 66 Wellington St. W., 42nd floor, Toronto, Ontario.
About GeneNews
--------------
GeneNews is an emerging molecular diagnostics company focused on the application of functional genomics to enable early diagnosis and personalized health management based on disease-specific biomarkers. The Company has been granted two U.S. patents for its core platform technology, the Sentinel Principle(R), which has the power to detect and stage virtually any disease or medical condition from a simple blood sample. GeneNews is currently applying the Sentinel Principle(R) in major areas with unmet clinical needs such as cancer, arthritis, cardiovascular disease and neurological disorders. GeneNews launched its first commercial product, ColonSentry(TM), a blood-based test to assess an individual's risk for colorectal cancer, in Canada in 2008. The Company expects ColonSentry(TM) to be introduced to the New York and New Jersey markets, via GeneNews' exclusive partnership for these U.S. states with Enzo Clinical Labs, in the second half of 2010. For more information on GeneNews and ColonSentry(TM), visit www.genenews.com and www.colonsentry.com.
Forward-Looking Statements
This press release contains forward-looking statements, which reflect the Company's current expectations regarding future events. The forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein. Investors should consult the Company's ongoing quarterly filings and annual reports for additional information on risks and uncertainties relating to these forward-looking statements. The reader is cautioned not to rely on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements.
GeneNews Limited
CONSOLIDATED BALANCE SHEETS
As at December 31
2009 2008
$ $
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ASSETS
Current
Cash and cash equivalents 510,806 1,414,395
Cash held in trust 2,286,200 -
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2,797,006 1,414,395
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Restricted cash 252,054 1,239,605
Short-term investments 91,710 -
Accounts receivable 293,528 549,134
Investment tax credits recoverable 400,000 400,000
Prepaid expenses and deposits 126,505 284,423
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Total current assets 3,960,803 3,887,557
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Property, plant and equipment, net 2,698,450 3,400,298
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6,659,253 7,287,855
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 1,159,141 3,117,937
Deferred revenue 10,200 54,331
Current portion of long-term debt 82,690 1,061,368
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Total current liabilities 1,252,031 4,233,636
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Convertible debentures 2,662,677 729,646
Long-term debt 136,858 219,548
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Total liabilities 4,051,566 5,182,830
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Commitments
Shareholders' equity
Share capital 48,752,731 44,542,030
Warrants 1,020,486 328,704
Contributed surplus 4,947,972 3,753,924
Deficit (52,113,502) (46,519,633)
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Total shareholders' equity 2,607,687 2,105,025
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6,659,253 7,287,855
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GeneNews Limited
CONSOLIDATED STATEMENTS OF
OPERATIONS, COMPREHENSIVE LOSS AND DEFICIT
(Expressed in Canadian dollars)
Years ended December 31
2009 2008
$ $
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REVENUE
Milestone 478,805 1,041,102
Non-refundable license 616,838 371,160
Sales 50,200 9,628
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1,145,843 1,421,890
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EXPENSES
Research and development 2,332,811 9,823,363
Sales and marketing 457,046 466,767
General and administrative 1,586,595 2,382,260
Stock-based compensation 1,195,550 1,020,362
Amortization of property, plant and equipment 707,034 815,520
Amortization of intellectual property - 400,380
Foreign exchange loss (gain) 1,080 (228,237)
Interest on long-term debt 475,477 120,544
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6,755,593 14,800,959
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Interest income 15,881 207,566
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Net loss and comprehensive loss for the year (5,593,869) (13,171,503)
Deficit, beginning of year (46,519,633) (33,348,130)
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Deficit, end of year (52,113,502) (46,519,633)
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Net loss and comprehensive loss per
common share
Basic and fully diluted $(0.09) $(0.24)
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Weighted average number of common
shares outstanding
Basic and fully diluted 59,760,918 55,728,108
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in Canadian dollars)
Years ended December 31
2009 2008
$ $
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OPERATING ACTIVITIES
Net loss for the year (5,593,869) (13,171,503)
Add items not involving cash
Debenture interest 430,820 -
Stock-based compensation 1,195,550 1,020,362
Impairment loss on property, plant
and equipment - 27,000
Amortization of property, plant
and equipment 707,034 815,520
Amortization of intellectual property - 400,380
Issuance of common shares for general
legal services 21,926 -
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(3,238,539) (10,908,241)
Changes in non-cash working capital balances
related to operations
Accounts receivable 255,606 1,033,108
Investment tax credits recoverable - 638,199
Prepaid expenses and deposits 157,918 228,491
Accounts payable and accrued liabilities (1,958,796) 1,457,244
Deferred revenue (44,131) (1,589,805)
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Cash used in operating activities (4,827,942) (9,141,004)
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FINANCING ACTIVITIES
Proceeds from share issuances, net 4,185,473 -
Proceeds from exercise of employee
stock options 1,800 251,100
Proceeds of issuance of convertible
debentures 2,193,993 1,058,350
Restricted cash 987,551 (839,605)
Repayment of long-term debt (1,061,368) (585,903)
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Cash provided by (used in) financing
activities 6,307,449 (116,058)
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INVESTING ACTIVITIES
Purchase of short-term investments (91,710) -
Additions to property, plant and equipment (5,186) (607,573)
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Cash used in investing activities (96,896) (607,573)
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Net increase (decrease) in cash, cash
equivalents and cash held in trust during
the year 1,382,611 (9,864,635)
Cash, cash equivalents and cash held in
trust, beginning of year 1,414,395 11,279,030
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Cash, cash equivalents and cash held in
trust, end of year 2,797,006 1,414,395
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Cash and cash equivalents are comprised
of the following:
Cash and cash equivalents 510,806 1,414,395
Cash held in trust 2,286,200 -
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2,797,006 1,414,395
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Supplemental cash flow information
Interest received 15,881 205,113
- -
Interest paid 44,657 118,157
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%SEDAR: 00009903E
For further information: Gailina Liew, President & COO, Office: (905) 739-2036, Mobile: (416) 844-0649, [email protected]
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