Spectral announces first quarter 2013 results
TORONTO, May 15, 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 unaudited financial results for the first quarter ended March 31, 2013.
First Quarter 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 May 14, 2013, 116 patients have been randomized into Spectral's EUPHRATES trial. -- 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 $7,576,000 in cash, cash equivalents and short-term investments. Subsequent to quarter end, the Company announced it closed a private placement for gross proceeds of $5.6 million. Under the terms of the private placement, Spectral issued 16,666,667 common shares in the capital of the Company to Toray Industries Inc. at a price of $0.30 per common share, for gross proceeds of $5,000,000. Other investors subscribed for an additional $600,000 under the same terms, bringing the total private placement gross proceeds to $5,600,000. 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. Toray's investment represents approximately 12.8% of the issued and outstanding common shares of Spectral, calculated on a non-diluted basis. -- Subsequent to quarter end, the Company announced the appointment of Dr. Gualtiero Guadagni as the Company's Vice President, Sales and Marketing. Dr. Guadagni will primarily be responsible for the development and expansion of commercial opportunities for Toraymyxin and Spectral's Endotoxin Activity Assay (EAA™) in Canada, the United States and Europe. "During the past few months, we solidified our cash position and strengthened our existing collaborative relationship with Toray Industries," said Dr. Paul Walker, President and CEO of Spectral Diagnostics. "On the clinical front, we continued to steadily enroll patients into our pivotal Phase III trial and are now 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 March 31, 2013 was $708,000 compared to $676,000 for the same period in the preceding year, representing an increase of 4.7%. Revenue was positively impacted by the revised terms of certain EAA™ distribution agreements that took effect during 2012. It is anticipated that revenue in 2013 will be consistent with levels achieved in 2012. Operating costs for the three months ended March 31, 2013 were $2,807,000 compared to $2,976,000 in the first quarter of 2012. This represents a decrease of $169,000. The Company continues to maintain a low-cost operating structure and expects no material increase in non-clinical operating costs in 2013. The Company concluded the first quarter of 2013 with cash, cash equivalents and short-term investment of $7,576,000 compared to $10,562,000 as at December 31, 2012. On April 2, 2013, the Company closed a private placement for gross proceeds of $5.6 million. The cash balance immediately following the private placement was $12,955,000. 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. Condensed Interim Statement of Financial Position (in thousands of Canadian dollars) March 31 December 31 2013 2012 $ $ Unaudited Audited Assets Current assets Cash and cash equivalents 2,403 5,425 Short-term investment 5,173 5,137 Trade and other receivables 673 590 Inventories 418 277 Prepayments 647 226 9,314 11,655 Non-current assets Property, plant and equipment 578 497 Intangible assets 428 434 1,006 931 Total assets 10,320 12,586 Liabilities Current liabilities Trade and other payables 1,672 1,913 Deferred revenue 74 99 Total liabilities 1,746 2,012 Equity Share capital 27,101 27,101 Contributed surplus 3,864 3,864 Other equity reserves 8,337 8,260 Deficit (30,728) (28,651) Total equity 8,574 10,574 Total liabilities and equity 10,320 12,586 Spectral Diagnostics Inc. Condensed Interim Statement of Loss and Comprehensive Loss For the three months ended March 31, 2013 and 2012 (Unaudited) (in thousands of Canadian dollars, except for share and per share data) 2013 2012 $ $ Revenue 708 676 Other income 5 36 Expenses Changes in inventories of finished goods and work- in-process 83 99 Raw materials and consumables used 111 99 Employee benefits 740 765 Consulting and professional fees 1,304 1,190 Management services 100 375 Regulatory and investor relations 48 123 Travel and entertainment 219 146 Depreciation and amortization 55 51 Foreign exchange loss 9 11 Other expenses 138 117 2,807 2,976 Operating loss (2,094) (2,264) Finance income 17 16 Loss and comprehensive loss for the period (2,077) (2,248) Basic and diluted loss per common share (0.02) (0.02) Weighted average number of common shares outstanding 113,883,394 113,883,394 Spectral Diagnostics Inc. Condensed Interim Statement of Changes in Equity (Unaudited) (in thousands of Canadian dollars, except number of shares) Contributed Share-based Total Issued capital surplus compensation Warrants Deficit equity Number $ $ $ $ $ $ Balance, January 1, 2012 113,883,394 27,101 3,864 2,939 5,143 (20,108) 18,939 Loss and comprehensive loss for the period - - - - - (2,248) (2,248) Share-based compensation - - - 92 - - 92 Balance, March 31, 2012 113,883,394 27,101 3,864 3,031 5,143 (22,356) 16,783 Balance, January 1, 2013 113,883,394 27,101 3,864 3,117 5,143 (28,651) 10,574 Loss and comprehensive loss for the period - - - - - (2,077) (2,077) Share-based compensation - - - 77 - - 77 Balance, March 31, 2013 113,883,394 27,101 3,864 3,194 5,143 (30,728) 8,574 Spectral Diagnostics Inc. Condensed Interim Statement of Cash Flows For the three months ended March 31, 2013 and 2012 (Unaudited) (in thousands of Canadian dollars) 2013 2012 $ $ Cash flow provided by (used in) Operating activities Loss and comprehensive loss for the period (2,077) (2,248) Adjustments for: Depreciation on property, plant, and equipment 48 45 Amortization of intangible assets 6 6 Share-based compensation 77 92 Changes in items of working capital : Trade and other receivables (83) (266) Inventories (141) 36 Prepayments (421) (161) Trade and other payables (241) 17 Deferred revenue (25) (26) Net cash used in operating activities (2,857) (2,505) Investing activities Property, plant and equipment expenditures (129) (72) Redemption of short-term investment 5,137 5,086 Purchase of short-term investment (5,173) (5,102) Net cash used in investing activities (165) (88) Decrease in cash and cash equivalents (3,022) (2,593) Cash and cash equivalents, beginning of period 5,425 13,470 Cash and cash equivalents, end of period 2,403 10,877 Anthony Businskas Executive Vice President and CFO 416-626-3233 ext. 2200 Adam Peeler Investor Relations TMX Equicom 416-815-0700 ext. 225 email@example.com SOURCE: Spectral Diagnostics Inc. To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/May2013/15/c7095.html CO: Spectral Diagnostics Inc. ST: Ontario NI: BTC CPR ELE ERN -0- May/15/2013 11:00 GMT