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TORONTO, May 14 /CNW/ - Spectral Diagnostics Inc. (TSX: SDI) today announced its financial results for the first quarter ended March 31st, 2008.
"We continued to commercialize our Endotoxin Activity Assay, EAA(TM), the only FDA cleared diagnostic for the measurement of endotoxin. Our primary strategy for driving clinical adoption is to demonstrate the value of EAA(TM) in combination with therapeutics," said Dr. Paul Walker, President and CEO of Spectral Diagnostics. "During the first quarter, we presented new findings showing mortality reduction in endotoxemic patients through the combined use of EAA(TM) and Toray's Toraymyxin(TM) column. We also announced, after the quarter end, that EAA(TM) will be used in a Phase III sub study for a multi-national clinical trial by a major pharmaceutical company developing a treatment for severe sepsis. We believe that the growing number of anti-endotoxin therapies in development for sepsis continue to provide advantageous opportunities for our EAA(TM) diagnostic, which can be used to identify patients, enable the therapeutics and monitor treatment."
Highlights
- Presented new findings showing a mortality reduction in endotoxemic
patients through the combined use of Spectral's Endotoxin Activity
Assay, EAA(TM), the only FDA cleared diagnostic for the measurement
of endotoxin, and Toray's Toraymyxin(TM) column at the
28th International Symposium on Intensive Care and Emergency Medicine
in Brussels, Belgium.
- Presented new findings demonstrating the clinical utility of its
EAA(TM) at the 12th Annual Critical Care for Endotoxemia congress in
Fukuoka, Japan.
- Appointed Mr. Anthony Bihl to the Company's Board of Directors.
Mr. Bihl is the President & CEO of American Medical Systems Inc,, and
has more than 25 years experience with regulated medical products
including diagnostics and diagnostic imaging.
- Subsequent to quarter end, in May, Spectral expanded its relationship
with Toray Medical Co. Ltd. to give Spectral access to
Toray's distributors in new geographic territories including
Canada, China, India, and Russia for the sales and promotion of the
EAA(TM) test in combination with its Toraymyxin(TM)
blood purification device.
- Subsequent to quarter end, in April, the Company announced that its
EAA(TM) test will be used to measure endotoxin levels during the
enrolment of patients in a Phase III sub-study, part of a
multinational clinical trial evaluating the safety and effectiveness
of a treatment for severe sepsis.
Financial Review
For the three months ended March 31, 2008, Spectral reported sales of $664,000, compared to sales of $841,000 for the corresponding period in 2007. Although EAA(TM) product sales increased substantially from a year ago, one significant customer for the Company's Troponin I reagent reached certain pre-established royalty plateaus in 2007, resulting in a reduction in related revenues. This accounted for the entire sales decrease in the first quarter. In future years, the impact of this will be offset as revenues from the Bio-Rad license agreement, which was signed in November 2007, are realized.
For the three months ended March 31, 2008, the Company reported a loss of $448,000 or ($0.02) per share, compared with a loss of $207,000 or ($0.01) per share for the corresponding period in 2007.
Cash and short term investments at March 31, 2008 totalled $4,494,000. Management expects that the Company will maintain a cash and short term investment balance in excess of $4 million for the rest of the year.
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. 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, 2008 and December 31, 2007
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(in thousands of dollars)
2008 2007
$ $
Assets
Current assets
Cash and cash equivalents 102 638
Short-term investments 4,392 4,289
Accounts receivable 718 677
Inventories 244 249
Prepaid expenses 160 55
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5,616 5,908
Property, plant and equipment 369 379
Commercial instruments 168 164
Purchased technology and trademarks 1,412 1,529
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7,565 7,980
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Liabilities
Current liabilities
Accounts payable and accrued liabilities 353 379
Deferred revenue 147 150
Convertible note payable 2,049 2,008
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2,549 2,537
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Shareholders' Equity
Common shares 2,524 2,524
Other equity 5,627 5,606
Deficit (3,135) (2,687)
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5,016 5,443
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7,565 7,980
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Spectral Diagnostics Inc.
Statements of Operations, Comprehensive Loss and Deficit - unaudited
For the three months ended March 31, 2008 and 2007
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(in thousands of dollars, except share and per share data)
2008 2007
$ $
Sales 664 841
Cost of sales 200 225
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Gross margin 464 616
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Operating expenses
Selling, general and administrative 792 813
Amortization 154 136
Foreign exchange gain (5) (9)
Stock-based compensation 21 29
Research and product development,
net of tax credits 14 (125)
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976 844
-------------------------
Loss before the following (512) (228)
Interest expense on convertible notes payable (41) (42)
Other net interest income 105 63
-------------------------
Loss and comprehensive loss for the period (448) (207)
Deficit - Beginning of period (2,687) (1,021)
-------------------------
Deficit - End of period (3,135) (1,228)
-------------------------
-------------------------
Basic and diluted loss per common share (0.02) (0.01)
-------------------------
-------------------------
Weighted average number of common shares
outstanding 24,118,424 24,114,001
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Spectral Diagnostics Inc.
Statements of Cash Flows - unaudited
For the three months ended March 31, 2008 and 2007
-------------------------------------------------------------------------
(in thousands of dollars)
2008 2007
$ $
Cash provided by (used in)
Operating activities
Loss and comprehensive loss for the period (448) (207)
Items not affecting cash
Amortization 154 136
Amortization of commercial instruments
included in cost of sales 5 33
Stock-based compensation expense 21 29
Interest on convertible notes payable 41 42
Changes in non-cash working capital (167) (421)
-------------------------
(394) (388)
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Investing activities
Purchase of property, plant and equipment (14) (25)
Purchase of technology and trademarks - (44)
Purchase of commercial instruments (22) (11)
Increase in short-term investments (103) (63)
Decrease in deferred revenue (3) -
-------------------------
(142) (143)
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Financing activities
Issuance of common shares - 4
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Decrease in cash and cash equivalents
during the period (536) (527)
Cash and cash equivalents - Beginning of period 638 945
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Cash and cash equivalents - End of period 102 418
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%SEDAR: 00002006E