Spectral announces fourth quarter and fiscal 2012 results

TORONTO, March 27, 2013 /CNW/ - Spectral Diagnostics Inc., (TSX:SDI) (OTCQX: 
DIAGF), a Phase III company developing the first theranostic treatment for 
patients with septic shock, today announced its audited financial results for 
the fourth quarter and year ended December 31, 2012. 
2012 Highlights: 


    --  Continued enrolling patients into the Company's Phase III
        EUPHRATES trial at a per site rate that is higher than previous
        sepsis trials. Directed by the Company's Endotoxin Activity
        Assay (EAA™), which is the only FDA-cleared diagnostic
        for the risk of developing sepsis, Spectral's EUPHRATES trial
        is currently targeted to enroll 306 evaluable patients at up to
        60 sites in North America. Contingent on maintaining current
        enrolment rates and timely site start ups, the trial should be
        fully enrolled by the end of 2014.
    --  As of March 25, 2013, 100 patients have been randomized into
        Spectral's EUPHRATES trial.
    --  Announced an exclusive distribution agreement with Toray
        International Italy S.r.l. - a subsidiary of Toray Industries,
        Inc. - to sell the Company's Endotoxin Activity Assay in
        combination with Toraymyxin in Saudi Arabia and Turkey. The
        expansion of commercial jurisdictions with Toray further
        confirms the outstanding market opportunity for the Company's
        unique theranostic treatment for septic shock.
    --  Subsequent to year end, announced that the first interim
        analysis has been conducted on the initial 76 randomized
        patients in its EUPHRATES trial. The Data and Safety Monitoring
        Board (DSMB), consisting of experts in the fields of critical
        care medicine, infectious disease, nephrology, biostatistics
        and regulatory affairs, reviewed the totality of the data set
        for evidence of safety concerns, such as adverse events and/or
        adverse device effects, related to the use of the Toraymyxin
        cartridge. The results from the first interim safety analysis
        by the DSMB state that there are no safety issues to date
        concerning the application of the Toraymyxin cartridge to
        patients in the EUPHRATES trial. In addition, the results state
        that the EUPHRATES clinical protocol appears to be defining the
        correct target patient population for this study.
    --  Concluded the reporting period with approximately $10.5 million
        in cash, cash equivalents and short- term investments.
    --  Subsequent to year end, on March 7, 2013, the Company announced
        it entered into a private placement agreement with Toray
        Industries, Inc. Under the terms of the private placement,
        Spectral will issue 16,666,667 common shares in the capital of
        the Company to Toray at a price of $0.30 per common share, for
        gross proceeds of $5 million. On March 18, 2013 the Company
        announced that other investors had subscribed for an additional
        $ 0.6 million under the same terms, bringing the total private
        placement gross proceeds to $5.6 million. The net proceeds of
        the private placement will be used to continue to support the
        Company's EUPHRATES clinical trial and for general operating
        purposes. Immediately after the closing of the private
        placement, Toray's investment will represent approximately
        12.6% of the issued and outstanding common shares of Spectral,
        calculated on a non-diluted basis. Closing of the private
        placement is expected at the beginning of April, 2013 and is
        subject to the approval of the Toronto Stock Exchange.

"2012 was a very important year for the Company," said Dr. Paul Walker, 
President and CEO of Spectral Diagnostics. "We made crucial and significant 
progress with our Phase III sepsis asset and consequently we are now 
potentially less than a year away from our second planned interim analysis of 
the trial data."

The second interim analysis will occur after 184 randomized patients have been 
followed for 28 days. At the second analysis, the trial's DSMB will advise 
Spectral on the trial's safety, efficacy or futility, with stopping rules in 
place for efficacy and futility. A sample size recalculation will be done if 
necessary. Management remains on track to disclose information from the second 
interim analysis in the first half of 2014.

Financial Review

Revenue for the three months ended December 31, 2012 was $647,000 compared to 
$628,000 for the same period in the preceding year. For the year ended 
December 31, 2012, revenue was $2,589,000 compared to $2,430,000 for the same 
period in 2011.

Revenue was positively impacted by the revised terms of certain EAA™ 
distribution agreements that took effect during 2012. Conversely, revenues 
were negatively impacted by the increased strength of the Canadian dollar 
compared to the U.S. dollar and the Euro. It is anticipated that revenue in 
2013 will be consistent with levels achieved in 2012.

For the quarter ended December 31, 2012, the Company reported a loss of 
$2,067,000 compared to a loss of $1,940,000 for the corresponding period in 
2011. For the year ended December 31, 2012, Spectral reported a loss of 
$8,543,000 compared to $6,713,000 for the same period in 2011. The Company's 
loss was greater for the three and twelve months of 2012 due to higher costs 
for its EUPHRATES trial.

Cash, cash equivalents and short-term investments on hand at December 31, 2012 
were $10.5 million. Cash was used during the quarter ended December 31, 2012 
to fund operations and for working capital purposes.

The total number of shares outstanding for the Company was 113,883,394 as at 
December 31, 2012.

About Spectral Diagnostics
Spectral is a Phase III company seeking U.S. FDA approval for its lead 
theranostics product for the treatment of severe sepsis with septic shock. 
Toraymyxin is a therapeutic hemoperfusion device that removes endotoxin, which 
can cause sepsis, from the bloodstream. Directed by the Company's Endotoxin 
Activity Assay (EAA™), the only FDA cleared diagnostic for the risk of 
developing sepsis. Spectral's EUPHRATES trial is the world's first 
theranostics trial in the area of sepsis.

Toraymyxin has been approved for therapeutic use in Japan and Europe, and has 
been used safely and effectively on more than 100,000 patients to date. In 
March 2009, Spectral obtained the exclusive development and commercial rights 
in the U.S. for Toraymyxin, and in November 2010, signed an exclusive 
distribution agreement for this product in Canada. More than 250,000 patients 
are diagnosed with severe sepsis and septic shock in North America each year, 
representing a greater than $1 billion market opportunity for Spectral. 
Spectral is listed on the Toronto Stock Exchange under the symbol SDI, and on 
the OTCQX under the symbol DIAGF. For more information please visit 
www.spectraldx.com

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.                                
Statement of Financial Position
                                                         

(in thousands of Canadian dollars)                       
                                                         
                                       December 31      December 31
                                               2012             2011
                                                  $                $
                                                                    

Assets                                                              

Current assets                                                      

Cash and cash equivalents                     5,425           13,470

Short-term investment                         5,137            5,086

Trade and other receivables                     590              515

Inventories                                     277              295

Prepayments                                     226              407
                                             11,655           19,773

Non-current assets                                                  

Property, plant and equipment                   497              419

Intangible assets                               434              459
                                                931              878
                                                                    

Total assets                                 12,586           20,651
                                                                    

Liabilities                                                         

Current liabilities                                                 

Trade and other  payables                     1,913            1,610

Deferred revenue                                 99              102

Total liabilities                             2,012            1,712
                                                                    

Equity                                                              

Share capital                                27,101           27,101

Contributed surplus                           3,864            3,864

Other equity reserves                         8,260            8,082

Deficit                                    (28,651)         (20,108)

Total equity                                 10,574           18,939
                                                                    

Total liabilities and equity                 12,586           20,651
                                                         
                                                         
                                                     

Spectral Diagnostics Inc.
Statement of Loss and Comprehensive Loss                      
For the years ended December 31, 2012
and 2011
                                                              

(in thousands of Canadian dollars,                            
except for share and per share data)
                                                              
                                                    2012           2011
                                                       $              $
                                                                       

Revenue                                            2,589          2,430
                                                                       

Other income                                         110            109
                                                                       

Expenses                                                               

Changes in inventories of finished goods             277            288
and work-in-process

Raw materials and consumables used                   471            264
                                                              

Employee benefits                                  2,944          2,662

Consulting and professional fees                   4,619          3,047

Management services                                1,013          1,500

Regulatory and investor relations                    502            270

Travel and entertainment                             772            554

Depreciation and amortization                        216            316

Foreign exchange loss                                 26              2

Other expenses                                       473            414
                                                  11,313          9,317
                                                                       

Operating loss                                   (8,614)        (6,778)
                                                                       

Finance  income                                       71             65
                                                                       

Loss and comprehensive loss for the year         (8,543)        (6,713)
                                                                       
                                                                       

Basic and diluted loss per common share           (0.08)         (0.07)
                                                                       

Weighted average number of common shares                               

outstanding                                  113,883,394     90,869,696
                                          
                                          
                                          

Spectral
Diagnostics
Inc.
Statement of
Changes in                                                                     
Equity
For the years
ended
December  31,
2012 and 2011
                                                                               

(in thousands
of Canadian                                                                    
dollars)
                                                                               
                Issued             Contributed  Share-based                   Total
                capital                surplus compensation Warrants  Deficit Equity
                     Number      $           $            $        $        $       $

Balance,        80,550,061  17,538       3,696        2,722    5,311 (13,395)  15,872
January 1,
2011

Private         33,333,333   9,563           -            -        -        -   9,563
placement

Loss and                  -      -           -            -        -  (6,713) (6,713)
comprehensive
loss for the
year

Share-based               -      -           -          217        -        -     217
compensation

Warrants                                   168                 (168)                -
expired

Balance,        113,883,394 27,101       3,864        2,939    5,143 (20,108)  18,939
December 31,
2011

Loss and                  -      -           -            -        -  (8,543) (8,543)
comprehensive
loss for the
year

Share-based               -      -           -          178        -        -     178
compensation

Balance,        113,883,394 27,101       3,864        3,117    5,143 (28,651)  10,574
December 31,
2012
                                                                               
                                                                               
                                                                               

Spectral Diagnostics Inc.
Statement of Cash Flows                                         
For the years ended December  31,
2012 and 2011
                                                                

(in thousands of Canadian dollars)                              
                                                                
                                                  2012             2011
                                                     $                $

Cash flow provided by (used in)                                        
                                                                       

Operating activities                                                   

Loss and comprehensive loss for the            (8,543)          (6,713)
year

Adjustments for:                                                       

  Depreciation on property, plant,                 191              173
  and equipment

  Amortization of intangible assets                 25              143

  Share-based compensation                         178              217

Changes in items of working capital :                                  

  Trade and other receivables                     (75)               80

  Inventories                                       18             (86)

  Prepayments                                      181            (376)

  Trade and other payables                         303              288

  Deferred revenue                                 (3)                1

Net cash used in operating activities          (7,725)          (6,273)
                                                                       

Investing activities                                                   

Property, plant and equipment                    (269)             (66)
expenditures

Redemption of short-term investment              5,086            5,021

Purchase of short-term investment              (5,137)          (5,086)

Net cash used in investing activities            (320)            (131)
                                                                       

Financing activities                                                   

Private placement                                    -            9,563

Net cash provided by  financing                      -            9,563
activities
                                                                       

(Decrease) increase in cash and cash           (8,045)            3,159
equivalents
                                                                       

Cash and cash equivalents, beginning            13,470           10,311
of year

Cash and cash equivalents, end of                5,425           13,470
year



Anthony Businskas Executive Vice President and CFO 416-626-3233 ext. 2200

Adam Peeler Investor Relations TMX Equicom 416-815-0700 ext. 225 
apeeler@tmxequicom.com 

SOURCE: Spectral Diagnostics Inc.

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CO: Spectral Diagnostics Inc.
ST: Ontario
NI: BTC CPR ELE ERN 

-0- Mar/27/2013 11:00 GMT


 
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