SQI Diagnostics Reports First Quarter Financial Results

TORONTO, Feb. 28 /CNW/ - SQI Diagnostics Inc. (TSXV: SQD), a medical systems automation company focused on evolving laboratory-based autoimmune biomarker testing, today announced its financial and operational results for the first quarter ended December 31, 2010.

First Quarter Highlights

  • Entered into a collaboration and evaluation agreement with a prominent U.S.-based reference laboratory and technology opinion leader.  SQI believes that the potential conversion of this evaluation agreement to a commercial agreement will result in a positive market reaction and greater demand for the Company's products. SQI expects to deliver the SQiDworks platform to this laboratory in the third quarter of fiscal 2011;

  • Continued to develop SQI's commercial relationship with Gamma-Dynacare Medical Labs (GDML) by working closely with GDML to develop its multiplexed rheumatoid arthritis business.  Subsequent to the quarter end, GDML took delivery of investigational use only IgXPLEX Quantitative Celiac product for GDML's internal evaluation. GDML is one of Canada's largest providers of laboratory services and solutions. Subsequent to SQI's quarter end, GDML released its first monthly newsletter. This marketing material featured the benefits of multiplexing rheumatoid arthritis (RA) biomarkers on an automated platform to all of GDML's customers, and is featured on GDML's website. SQI is optimistic that this and similar marketing efforts will drive the continued growth of our sales of the RA product at GDML, and this could result in increased revenue for the Company.

  • Focused on the development, verification and validation of additional clinical panels of multiplexed biomarkers including quantitative autoimmune test panels for vasculitis, lupus and inflammatory bowel diseases (Crohn's disease, ulcerative colitis).  The Company continued to complete the development of its second-generation quantitative panels for rheumatoid arthritis and Celiac disease and expects to validate and file these tests for regulatory review by the end of June, 2011.

  • SQI's IgXPLEX Vasculitis assay is expected to complete clinical validation in the third quarter of fiscal 2011. Collaborative studies demonstrating the utility of the Company's vasculitis assay are scheduled to be presented at the Fifteenth International Vasculitis & ANCA Workshop in May, 2011.

  • During the reporting period, the Company received and responded to questions from the FDA regarding its IgXPLEX Celiac 4-PLEX panel. The questions and responses are described by the Company as those expected in the normal course of the regulatory process.

"SQI made essential clinical, regulatory and commercial advancements in the first quarter, all of which strengthen our position as the forerunner in the global automated, multiplex laboratory diagnostics space," said Andrew Morris, CFO of SQI Diagnostics.

Financial Results

For the quarter ended December 31, 2010, SQI recorded a net loss of $2,255,000 or $0.07 per share, compared to a net loss of $1,620,000 or $0.06 per share per share for the first quarter a year ago.

The increased loss for the quarter ended December 31, 2010 was primarily related to increases in activity and expenses in the discovery efforts for, and development of, several IgXPLEX assays.

Gross research and development expenditures for the three month period ended December 31, 2010 were $1,499,000 compared to the $1,054,000 for the three month period ended December 31, 2009.  The increase in R&D expense for the three month period ended December 31, 2010 compared to the same period the prior year, resulted from increased R&D activity due to more assay panels in development, and to continued regulatory validation efforts related to the IgXPLEX Celiac assays.  In the first quarter of 2010, SQI had two panels in development. In the first quarter of 2011, in addition to the IgXPLEX Celiac assay in regulatory validation, the Company had five panels in development and one additional panel at an earlier stage of development. 

Corporate and general expenses totaled $329,000 for the quarter ended December 31, 2010 compared to $209,000 for the quarter ended December 31, 2009. During the first quarter of fiscal 2011, corporate expenses increased primarily as a result of increased personnel, higher salary costs, and increased occupancy costs. 

At December 31, 2010, cash and cash equivalents were $6,471,000 compared to $9,408,000 at September 30, 2010. 

Detailed financial statements and the MD&A are available at www.sedar.com.

About SQI Diagnostics
SQI Diagnostics is a medical systems company that develops proprietary technology in multiplexing, miniaturization and automation.  SQI provides laboratories the ability to simultaneously analyze multiple biomarkers, deliver accurate patient results in less time, significantly reduce labour, and increase profits...All in One Drop.  For more information, please visit www.sqidiagnostics.com

Certain information in this press release is based on beliefs and assumptions of the Company's senior management and information currently available to it that may constitute forward-looking information within the meaning of securities laws. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks and uncertainties. Actual results, events, and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE SQI Diagnostics Inc.

For further information:

Chief Financial Officer
Andrew Morris
416.674.9500 ext. 229
Media and Investor Relations
Adam Peeler
416.815.0700 ext. 225

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