SQI Diagnostics Reports Fourth Quarter and Year End Financial Results

TORONTO, Jan. 21 /CNW/ - SQI Diagnostics Inc. (TSX-V: SQD), a medical systems automation company focused on evolving laboratory-based autoimmune biomarker testing, today announced its financial and operational results for the fourth quarter and year ended September 30, 2010.

Highlights

  • Announced that the U.S. Food and Drug Administration (FDA) cleared the Company's automated SQiDworks™ Diagnostics Platform and its multiplexed IgXPLEX™ Rheumatoid Arthritis (RA) assay for marketing in the United States

  • Completed two separate private placements for total gross proceeds of approximately $12.3 million, which strengthened the Company's balance sheet and diversified its institutional shareholder base;        

  • Announced that Gamma-Dynacare Medical Laboratories, one of Canada's largest providers of laboratory services, agreed to put into operation SQI's SQiDworks platform, and to purchase SQI's multiplexed Rheumatoid Arthritis consumables to meet its commercial needs; the agreement with Gamma-Dynacare marked the first conversion of an evaluation platform to a revenue-generating platform for SQI;

  • Accelerated the development, verification and validation of additional clinical panels of biomarkers to multiplex including the highest-demand autoimmune test panels for celiac disease, vasculitis, lupus and inflammatory bowel diseases (Crohn's disease, ulcerative colitis);

  • During and subsequent to the year end, the Company entered into multiple collaboration agreements with leading clinical and research institutes, highlighting the market interest in multiplexing and the Company's achievements to date.  These collaborations significantly improve the Company's ability to progress its products through the development process by obtaining access to patient sera needed for assay development, verification of in-development products and final product clinical validation;

  • Applied for FDA regulatory clearance of its IgXPLEX Celiac 4-PLEX panel.  Subsequent to the year end, the Company received and responded to questions from the FDA regarding this panel. The questions and responses are described by the Company as those expected in the normal course of the regulatory process; 

  • Announced that Health Canada issued a medical device license for its automated IgXPLEX Celiac microarray test kit that runs on the Company's automated SQiDworks platform. The license allows SQI to market and sell the IgXPLEX Celiac product in Canada.

"Our clinical and commercial accomplishments in 2010 built a strong foundation for SQI that will support our emergence as a global leader in the automated, multiplex laboratory diagnostics space," said Andrew Morris, CFO of SQI Diagnostics. "Our marketing efforts are gaining traction and we are moving closer to launching additional autoimmune multiplexed panels for clinical laboratories to utilize with our diagnostics platform. We are optimistic that in fiscal 2011 and beyond, we will continue our transition towards material revenue generation."

Financial Results
For the year ended September 30, 2010, SQI recorded a net loss of $8,073,000 or $0.27 per share, compared to a net loss of $5,910,000 or $0.23 per share per share for the year ended September 30, 2009.

For the quarter ended September 30, 2010, SQI recorded a net loss of $2,621,000 or $0.08 per share, compared to a net loss of $1,616,000 or $0.06 per share per share for the quarter ended September 30, 2009. The increased loss for the quarter ended September 30, 2010 was primarily related to increases in activity and expenses in the discovery efforts for, and development of, several IgXPLEX assays, including ordinary increases in wage and wage-related expenses owing to an increase in personnel and increased lab expenditures to support the greater number of projects.

Gross research and development (R&D) expenditures were $5,354,000 for the year ending September 30, 2010 compared to $3,449,000 for the year ending September 30, 2009. 

R&D expenditures for the three month period ended September 30, 2010 were $1,621,000 compared to $872,000 for the three month period ended September 30, 2009.  The increase in R&D expense for the three month period ended September 30, 2010 compared to the same period in the prior year resulted from more R&D activity with an increased number of assay panels in development, and due to regulatory validation efforts related to the IgXPLEX Celiac assay. 

Corporate expenses, which include administrative salaries and related expenses, general and administrative expenses, advertising and promotion expenses, travel expenses, interest expenses and professional and consulting fees totaled $299,000 for the quarter ended September 30, 2010 compared to $290,000 for the quarter ended September 30, 2009.  

At September 30, 2010, cash and cash equivalents were $9,408,000 compared to $3,180,000 at September 30, 2009. 

Management believes that cash on hand at September 30, 2010, will be sufficient to fund Company operations for at least 12 months.  A successful commercial launch and generation of anticipated revenue in the 2011 fiscal year would extend this period.  

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
amorris@sqidiagnostics.com
Media and Investor Relations
Adam Peeler
416.815.0700 ext. 225
apeeler@equicomgroup.com


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