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 
apeeler@tmxequicom.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