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Spectral announces second quarter 2009 results

^{Published on 2009-08-13 04:03:27, Last Modified on 2009-08-13 04:03:36 - Market Wire}
 

 TORONTO, Aug. 13 /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, 2009. "During the quarter, results of the EUPHAS trial in Italy were published in the Journal of American Medical Association (JAMA). The findings showed that the Toraymyxin(TM) cartridge significantly reduced mortality from sepsis in a prospective controlled trial, further supporting our planned U.S. registration trial for this product," said Dr. Paul Walker, President and CEO of Spectral. "The degree of reduction in mortality demonstrated by Toraymyxin(TM) in the EUPHAS trial is an unprecedented result for sepsis therapies. We believe that Toraymyxin(TM), when used together with our proprietary Endotoxin Activity Assay (EAA(TM)), has the potential to fulfill an unmet need for the approximately 125,000 patients that develop severe sepsis or septic shock in the U.S. each year. Our work towards obtaining an Investigational Device Exemption (IDE) from the U.S. FDA is on schedule and we should be in a position to initiate our registration trial for Toraymyxin(TM) following IDE approval." Financial Review For the second quarter ended June 30, 2009, Spectral reported revenues of $776,000, compared to $785,000 for the corresponding period in 2008. For the six months ended June 30, 2009, revenues were $1,618,000 compared to $1,449,000 for the same 2008 period. Sales of the EAA(TM) diagnostic increased, while royalty and reagent revenues from the Company's proprietary Troponin I products remained consistent with prior year levels. Operating expenses for the second quarter ended June 30, 2009 were $1,186,000, compared to $978,000 for the corresponding period in 2008. For the six months ended June 30, 2009, operating expenses were $2,229,000 compared to $1,954,000 in the same 2008 period. The increase in operating expenses in the first half of the year was entirely due to incremental consulting costs related to the development of the clinical pathway for Toraymyxin(TM) and the foreign exchange impact of a rising Canadian dollar against the U.S. currency. Operating expenses related to the existing business remained consistent with prior year levels. For the second quarter ended June 30, 2009, the Company reported a loss of $701,000 or ($0.03) per share, compared to a loss of $419,000 or ($0.02) per share for the corresponding period in 2008. The second quarter loss included the above-mentioned consulting costs and foreign exchange loss, totaling $248,000, and an unrealized loss on the Company's bond portfolio ($91,000). For the six months ended June 30, 2009, the Company reported a loss of $1,105,000 or ($0.05) per share, compared to a loss of $867,000 or ($0.04) per share for the corresponding period in 2008. Cash and short term investments as at June 30, 2009 totaled $3,436,000, compared to $4,297,000 as at December 31, 2008. Management expects that the Company will maintain a cash and short term investment balance of approximately $3,000,000 for the rest of 2009. 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 to treat endotoxemia, Spectral is well-positioned to promote 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 June 30, 2009 and December 31, 2008 ------------------------------------------------------------------------- (in thousands of dollars) 2009 2008 $ $ Assets Current assets Cash and cash equivalents 491 297 Short-term investments 2,945 4,000 Accounts receivable 741 860 Inventories 187 203 Prepaid expenses 122 42 ----------------------- 4,486 5,402 Property, plant and equipment 459 493 Commercial instruments 114 132 Purchased technology and trademarks 823 1,058 ----------------------- 5,882 7,085 ----------------------- ----------------------- Liabilities Current liabilities Accounts payable and accrued liabilities 446 540 Deferred revenue 236 322 Convertible notes payable 2,254 2,172 ----------------------- 2,936 3,034 ----------------------- Shareholders' Equity Common shares 2,524 2,524 Other equity 5,716 5,716 Deficit (5,294) (4,189) ----------------------- 2,946 4,051 ----------------------- 5,882 7,085 ----------------------- ----------------------- Spectral Diagnostics Inc. Statements of Operations, Comprehensive Loss and Deficit - unaudited For the six months ended June 30, 2009 and 2008 ------------------------------------------------------------------------- (in thousands of dollars, except share and per share data) 3 Months Ended 6 Months Ended June 30 June 30 2009 2008 2009 2008 $ $ $ $ Sales 776 785 1,618 1,449 Cost of sales 166 189 350 389 ----------------------- ----------------------- Gross margin 610 596 1,268 1,060 ----------------------- ----------------------- Operating expenses Selling, general and administrative 927 774 1,818 1,566 Amortization 159 164 323 318 Foreign exchange loss 84 7 52 2 Stock-based compensation - 22 - 43 Research and product development, net of tax credits 16 11 36 25 ----------------------- ----------------------- 1,186 978 2,229 1,954 ----------------------- ----------------------- Loss before the following (576) (382) (961) (894) Interest expense on convertible notes payable (41) (41) (82) (82) Other net investment (loss) income (84) 4 (62) 109 ----------------------- ----------------------- Loss and comprehensive loss for the period (701) (419) (1,105) (867) Deficit - Beginning of period (4,593) (3,135) (4,189) (2,687) ----------------------- ----------------------- Deficit - End of period (5,294) (3,554) (5,294) (3,554) ----------------------- ----------------------- ----------------------- ----------------------- Basic and diluted loss per common share (0.03) (0.02) (0.05) (0.04) ----------------------- ----------------------- ----------------------- ----------------------- Weighted average number of common shares outstanding 24,118,424 24,118,424 24,118,424 24,118,424 ----------------------- ----------------------- ----------------------- ----------------------- Spectral Diagnostics Inc. Statements of Cash Flows - unaudited For the six months ended June 30, 2009 and 2008 ------------------------------------------------------------------------- (in thousands of dollars) 3 Months Ended 6 Months Ended June 30 June 30 2009 2008 2009 2008 $ $ $ $ Cash provided by (used in) Operating activities Loss and comprehensive loss for the period (701) (419) (1,105) (867) Items not affecting cash Amortization 159 164 323 318 Amortization of commercial instruments included in cost of sales 22 7 43 12 Stock-based compensation expense - 22 - 43 Interest on convertible notes payable 41 41 82 82 Unrealized loss on short-term investments 91 - 91 - Changes in non-cash working capital 344 - (39) (167) ----------------------- ----------------------- (44) (185) (605) (579) ----------------------- ----------------------- Financing activities Bank indebtedness (385) 195 - 195 ----------------------- ----------------------- Investing activities Purchase of property, plant and equipment (51) (101) (54) (115) Purchase of commercial instruments (3) - (25) (22) Decrease (increase) in short-term investments 1,001 2 964 (101) Decrease in deferred revenue (43) (5) (86) (8) ----------------------- ----------------------- 904 (104) 799 (246) ----------------------- ----------------------- Increase (decrease) in cash and cash equivalents during the period 475 (94) 194 (630) ----------------------- ----------------------- Cash and cash equivalents - Beginning of period 16 102 297 638 ----------------------- ----------------------- Cash and cash equivalents - End of period 491 8 491 8 ----------------------- ----------------------- ----------------------- ----------------------- %SEDAR: 00002006E 

For further information: Dr. Paul Walker, President & CEO, (416) 626-3233 ex. 2100; Casey Gurfinkel, Investor Relations, (416) 815-0700 ext. 283, [ cgurfinkel@equicomgroup.com ]