Spectral announces second quarter 2010 results
TORONTO, Aug. 12 /CNW/ - Spectral Diagnostics Inc., (TSX: SDI), a company focused on bringing to market a diagnostic and a therapeutic targeting severe sepsis, today announced its financial results for the second quarter ended June 30, 2010.
"During the second quarter we continued to implement our US pivotal trial for Toraymyxin(TM), a therapeutic hemoperfusion device that removes endotoxin from the bloodstream and is guided by our FDA cleared endotoxin activity assay, the EAA(TM). Activities during the quarter were focused on clinical site evaluation and qualification, with the objective of having all 15 sites enrolling patients in the second half of this year," said Dr. Paul Walker, President and CEO of Spectral. "We also continued to forge academic partnerships that leverage our knowledge and leadership in this field. As a result, additional clinical papers about significant findings in the area of endotoxin and its role in sepsis were published this quarter. This new data lends greater support to the Toraymyxin(TM) product and strengthens our confidence in the US pivotal trial."
Highlights:
- Publication of an important new reference book on the subject of
endotoxin entitled, "Endotoxemia and Endotoxin Shock: Disease,
Diagnosis and Therapy." The publication contains a section that
focuses entirely on extracorporeal therapies, such as Toraymyxin(TM),
as well as chapters that demonstrate the utility of the EAA(TM) to
identify patients who are endotoxemic and to monitor the effects of
this therapy.
- Received the McMaster University Industry Partner of the Year Award,
earned for Spectral's contribution to the discovery and development
of aptamer technology for the diagnosis and treatment of sepsis.
- Completed evaluation and training of a number of centres
participating in the Toraymyxin(TM) pivotal trial.
Financial Review
For the second quarter ended June 30, 2010, Spectral reported revenues of $678,000, compared to $776,000 for the corresponding period in 2009. For the six months ended June 30, 2010, revenues were $1,426,000 compared to $1,618,000 for the same 2009 period. EAA(TM) diagnostic sales and royalty revenues from the Company's proprietary Troponin I products were relatively consistent year over year. The lower sales in 2010, compared to 2009, were due primarily to the foreign exchange impact of a strengthening Canadian dollar versus the US and Euro currencies.
For the second quarter ended June 30, 2010, the Company reported a loss of $1,270,000 or ($0.02) per share, compared to a loss of $701,000 or ($0.03) per share for the corresponding period in 2009. For the six months ended June 30, 2010, the Company reported a loss of $3,213,000 or ($0.06) per share, compared to a loss of $1,105,000 or ($0.05) per share for the corresponding period in 2009. The year to date increase in the loss of $2,108 is attributable primarily to the increase in clinical trial costs related to IDE approval and to trial start-up ($704), service fees ($500) paid to Medwell Capital ("Medwell") (formerly BioMS Medical ("BioMS")), pursuant to a three year, $3 million service contract that became effective January 1, 2010, and the stock based compensation expense ($792) that arose on the issuance of 1,800,000 stock options in the first quarter of 2010. Operating expenses related to the existing business remained consistent with prior year levels.
Cash and cash equivalents as at June 30, 2010 totaled $17,336,000, compared to $2,944,000 as at December 31, 2009. The increase is due entirely to the net proceeds of the financing completed in the first quarter.
Total shares outstanding at June 30, 2010 amounted to 75,826,549 (June 30, 2009 - 24,118,424).
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 June 30, 2010 and December 31, 2009
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(in thousands of dollars)
2010 2009
$ $
-----------------------
Assets
Current assets
Cash and cash equivalents 17,336 2,944
Accounts receivable 687 781
Inventories 340 123
Prepaid expenses 110 45
-----------------------
18,473 3,893
Property, plant and equipment 437 457
Commercial instruments 73 94
Purchased technology and trademarks 854 588
-----------------------
19,837 5,032
-----------------------
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Liabilities
Current liabilities
Accounts payable and accrued liabilities 669 1,077
Current portion of convertible notes payable 1,295 2,336
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1,964 3,413
Deferred revenue 189 254
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2,153 3,667
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Shareholders' Equity
Common shares 21,264 2,524
Other equity 6,586 5,794
Deficit (10,166) (6,953)
-----------------------
17,684 1,365
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19,837 5,032
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Spectral Diagnostics Inc.
Statements of Operations, Comprehensive Loss and Deficit - unaudited
For the six months ended June 30, 2010 and 2009
-------------------------------------------------------------------------
(in thousands of dollars, except share and per share data)
3 Months Ended 6 Months Ended
June 30 June 30
2010 2009 2010 2009
$ $ $ $
Sales 678 776 1,426 1,618
Cost of sales 155 166 319 350
----------------------- -----------------------
Gross margin 523 610 1,107 1,268
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Operating expenses
Selling, general and
administrative 763 763 1,661 1,554
Clinical trial 624 164 968 264
Service fees 250 - 500 -
Amortization 156 159 311 323
Foreign exchange loss(gain) (26) 84 13 52
Stock-based compensation - - 792 -
Research and product
development, net of tax
credits 8 16 24 36
----------------------- -----------------------
1,775 1,186 4,269 2,229
----------------------- -----------------------
Loss before the following (1,252) (576) (3,162) (961)
Interest on convertible
notes payable (24) (41) (59) (82)
Other net investment
income (loss) 6 (84) 8 (62)
----------------------- -----------------------
Loss and comprehensive loss
for the period (1,270) (701) (3,213) (1,105)
Deficit - Beginning of
period (8,896) (4,593) (6,953) (4,189)
----------------------- -----------------------
Deficit - End of period (10,166) (5,294) (10,166) (5,294)
----------------------- -----------------------
----------------------- -----------------------
Basic and diluted loss
per common share (0.02) (0.03) (0.06) (0.05)
----------------------- -----------------------
----------------------- -----------------------
Weighted average number
of common shares
outstanding 75,822,318 24,118,424 58,404,514 24,118,424
----------------------- -----------------------
----------------------- -----------------------
Spectral Diagnostics Inc.
Statements of Cash Flows - unaudited
For the six months ended June 30, 2010 and 2009
-------------------------------------------------------------------------
(in thousands of dollars)
3 Months Ended 6 Months Ended
June 30 June 30
2010 2009 2010 2009
$ $ $ $
Cash provided by (used in)
Operating activities
Loss and comprehensive
loss for the period (1,270) (701) (3,213) (1,105)
Items not affecting cash
Amortization 156 159 311 323
Amortization of
commercial instruments
included in cost of
sales 16 22 48 43
Stock-based compensation
expense - - 792 -
Interest on convertible
notes payable 24 41 59 82
Unrealized loss on
short-term investments - 91 - 91
Changes in non-cash
working capital (224) 344 (1,696) (39)
----------------------- -----------------------
(1,298) (44) (3,699) (605)
----------------------- -----------------------
Financing activities
Bank indebtedness - (385) - -
Proceeds on issue of
private placement - - 17,608 -
Proceeds on exercise of
stock options 9 - 32 -
Settlement of convertible
notes payable - - 1,100 -
----------------------- -----------------------
9 (385) 18.740 -
Investing activities
Purchase of property,
plant and equipment (32) (51) (55) (54)
Purchase of commercial
instruments (13) (3) (27) (25)
Purchase of technology
and trademarks (502) - (502) -
Decrease in short-term
investments - 1,001 - 964
Decrease in deferred
revenue (32) (43) (65) (86)
----------------------- -----------------------
(579) 904 (649) 799
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Increase (decrease) in
cash and cash equivalents
during the period (1,868) 475 14,392 194
----------------------- -----------------------
Cash and cash equivalents -
Beginning of period 19,204 16 2,944 297
----------------------- -----------------------
Cash and cash equivalents -
End of period 17,336 491 17,336 491
----------------------- -----------------------
----------------------- -----------------------
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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