Spectral announces first quarter financial results
TORONTO, May 14 /CNW/ - Spectral Diagnostics Inc. (TSX:SDI) today announced its operational highlights and financial results for the first quarter ended March 31, 2010.
"During the first quarter we continued to focus on preparations for the initiation of our US pivotal trial for Toraymyxin(TM), a therapeutic hemoperfusion device that removes endotoxin from the bloodstream. Toraymyxin(TM) has the potential to fulfill an unmet need for the approximately 250,000 patients that develop severe sepsis or septic shock in the US each year. In combination with our EAA(TM) diagnostic, this would be the first theranostic treatment for sepsis," said Dr. Paul Walker, President and CEO of Spectral. "With the cash resources now in place and our recent Investigational Device Exemption ("IDE") approval from the FDA, we are planning to start the trial in the first half of this year."
Highlights:
- IDE approved by the US FDA on February 26, 2010.
- Completed private placement for $19.5 million on March 2, 2010.
- Appointed Mr. Kevin Giese, President, CEO and Director of BioMS
Medical and Mr. Laine Woollard, QC, Senior Legal Counsel of TEC
Edmonton, to the Company's Board of Directors.
- Presentations on the role of endotoxin in health and disease, and of
the utility of Spectral's EAA(TM) assay, were made by twelve thought
leaders in the field of sepsis at the 8th Annual World Congress on
Trauma, Shock, Inflammation and Sepsis in Munich, Germany that was
held from March 9-13, 2010.
Financial Review
For the three-months ended March 31, 2010, Spectral reported sales of $748,000 compared to $842,000 for the corresponding period in 2009. First quarter sales were consistent year over year but were negatively impacted by the foreign exchange effect of the strengthening Canadian dollar versus the US and Euro currencies.
Selling, general and administrative expenses for the quarter ended March 31, 2010 were $1,492,000 compared to $891,000 for the corresponding period in 2009. The increase is attributable primarily to incremental consulting and regulatory costs of $298,000 related to the commercialization of Toraymyxin(TM) as the Company completed its IDE and prepared to initiate the US pivotal trial. In addition, the first quarter expenses in 2010 included $250,000 of fees paid to BioMS Medical pursuant to a three year services agreement that became effective January 1, 2010. Other operating expenses, that support the existing business, have not increased substantially year over year.
For the three-months ended March 31, 2010, the Company reported a loss of $1,943,000, or ($0.05) per share, compared to a loss of $404,000 or ($0.02) per share for the corresponding period in 2009. The first quarter loss in 2010 included the aforementioned expenses, totalling $548,000 and $792,000 of stock based compensation expense related to the issue of stock options to directors, officers and employees, as approved by shareholders, on closing of the financing.
Cash on hand at March 31, 2010 was $19,204,000 compared with $2,944,000 at December 31, 2009. The increase was attributable to net proceeds from the financing that closed on March 2, 2010.
The total number of shares outstanding for the Company was 75,809,049 as at March 31, 2010.
Notice of Annual General Meeting
Spectral will hold its Annual General Meeting of Shareholders at 4:00 PM on May 20, 2010 at the offices of Stikeman, Elliott LLP, Suite 5300, 199 Bay Street, Toronto, Ontario.
About Spectral Diagnostics
Spectral is a leader in the battle against sepsis. Spectral's lead product is its Endotoxin Activity Assay (EAA(TM)), the only FDA cleared assay for the measurement of endotoxin. With the growing awareness for the role of endotoxemia in sepsis and the increasing number of therapies being developed for this indication, Spectral is well-positioned to drive the adoption of the EAA(TM), which can be used to identify patients, enable therapeutics and monitor treatment. In March 2009, Spectral obtained the exclusive development and commercial rights in the U.S. for Toraymyxin(TM), a therapeutic for the treatment of sepsis that removes endotoxin from the bloodstream. Spectral will seek FDA approval for Toraymyxin(TM) and intends to commercialize the product together with EAA(TM). Spectral is listed on TSX under the symbol SDI.
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.
Balance Sheets - unaudited
As at March 31, 2010 and December 31, 2009
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(in thousands of dollars)
2010 2009
$ $
Assets
Current assets
Cash 19,204 2,944
Accounts receivable 714 781
Inventories 242 123
Prepaid expenses 133 45
--------------------------
20,293 3,893
Property, plant and equipment 443 457
Commercial instruments 76 94
Purchased technology and trademarks 470 588
--------------------------
21,282 5,032
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Liabilities
Current liabilities
Accounts payable and accrued liabilities 845 1,077
Current portion of convertible notes payable 1,271 2,336
--------------------------
2,116 3,413
Deferred revenue 221 254
--------------------------
2,337 3,667
--------------------------
Shareholders' Equity
Common shares 21,255 2,524
Other equity 6,586 5,794
Deficit (8,896) (6,953)
--------------------------
18,945 1,365
--------------------------
21,282 5,032
--------------------------
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Spectral Diagnostics Inc.
Statements of Operations, Comprehensive Loss and Deficit - unaudited
For the three months ended March 31, 2010 and 2009
-------------------------------------------------------------------------
(in thousands of dollars, except share and per share data)
2010 2009
$ $
Sales 748 842
Cost of sales 164 184
--------------------------
Gross margin 584 658
--------------------------
Operating expenses
Selling, general and administrative 1,492 891
Amortization 155 164
Foreign currency exchange loss (gain) 39 (32)
Stock-based compensation 792 -
Research and product development, net of tax
credits 16 20
--------------------------
2,494 1,043
--------------------------
Loss before the following (1,910) (385)
Interest on convertible notes payable (35) (41)
Other net investment income 2 22
--------------------------
Loss and comprehensive loss for the period (1,943) (404)
Deficit - Beginning of period (6,953) (4,189)
--------------------------
Deficit - End of period (8,896) (4,593)
--------------------------
--------------------------
Basic and diluted loss per common share (0.05) (0.02)
--------------------------
--------------------------
Weighted average number of common shares
outstanding 40,793,181 24,118,424
--------------------------
--------------------------
Spectral Diagnostics Inc.
Statements of Cash Flows - unaudited
For the three months ended March 31, 2010 and 2009
-------------------------------------------------------------------------
(in thousands of dollars)
2010 2009
$ $
Cash provided by (used in)
Operating activities
Loss and comprehensive loss for the period (1,943) (404)
Items not affecting cash
Amortization 155 164
Amortization of commercial instruments included
in cost of sales 32 21
Stock-based compensation expense 792 -
Interest on convertible notes payable 35 41
Changes in non-cash working capital (1,472) (383)
--------------------------
(2,401) (561)
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Investing activities
Purchase of property, plant and equipment (23) (3)
Purchase of commercial instruments (14) (22)
Increase in short-term investments - (37)
Decrease in deferred revenue (33) (43)
--------------------------
(70) (105)
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Financing activities
Bank indebtedness - 385
Proceeds on issue of private placement 17,608 -
Proceeds on exercise of stock options 23 -
Settlement of convertible notes payable 1,100 -
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18,731 385
Increase (decrease) in cash during the period 16,260 (281)
Cash - Beginning of period 2,944 297
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Cash - End of period 19,204 16
--------------------------
--------------------------
Non cash working capital and financing activities
Decrease in current portion of convertible notes
payable (1,100) -
Settlement of convertible notes payable 1,100 -
%SEDAR: 00002006E
For further information: Dr. Paul Walker, President & CEO, (416) 626-3233 ext. 2100; Casey Gurfinkel, Investor Relations, (416) 815-0700 ext. 283, [email protected]
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