DiagnoCure Announces Fourth Quarter 2013 And Year-End Results
Published: Jan 17, 2014
Providing Corporate Update on Key Projects
QUEBEC CITY, Jan. 16, 2014 /PRNewswire/ - DiagnoCure, Inc. (TSX: CUR) (OTCQX: DGCRF) (the "Corporation") today reported financial and operational results for the fourth quarter 2013 and fiscal year ended October 31, 2013. The Corporation announced a net loss of $1,334,099 or $0.03 per share for the fourth quarter ended October 31, 2013, compared to $1,978,355 or $0.05 per share for the same period in 2012 and a net loss of $3,566,942 or $0.08 per share for fiscal year 2013 compared to $3,679,324 or $0.09 per share for the same period in 2012. At the end of the quarter, cash, short-term investments and long-term investments stood at $4,190,296 compared to $5,824,771 at the end of fiscal year 2012.
During fiscal year 2013, PCA3 royalties paid to DiagnoCure by Hologic in 2013 increased by 14% compared with 2012, representing worldwide sales of less than $US8.5 million. DiagnoCure believes that this modest increase in sales is not representative of the true commercial potential of this product, considering the consensus clinical utility that has emerged from several published studies (see "Update on PCA3" below).
Consequently, in 2013, DiagnoCure maintained diligent communications with Hologic in an effort to increase sales of PCA3. Under the leadership of Richard Bordeleau, Senior Advisor to the Board, and as part of its effort to transform the Corporation and ensure the commercial development of PCA3, in the last months of 2013, DiagnoCure approached Hologic with the intent to purchase its entire prostate oncology business, allowing the Corporation to regain the rights granted to Hologic on PCA3 and to expand its portfolio with T2:ERG, a promising biomarker identified by Dr. Arul Chinnaiyan from the University of Michigan who is currently offering the combination of PCA3 and T2:ERG in his CLIA-certified laboratory.
In 2013, DiagnoCure also obtained a grant from the National Research Council of Canada supporting research developing a new multi-marker prostate cancer test with an objective of broadening the Corporation's portfolio in this market segment. New patent applications were also filed, further strengthening DiagnoCure's intellectual property portfolio in this field. The first application is due to be published before the end of this month.
Regarding the PrevistageTM GCC colon cancer test, in the last quarter of 2013, DiagnoCure intensified discussions aimed at obtaining multiple partners to market GCC in both North America and Europe. DiagnoCure believes that the test will be made more widely available with a combination of public, academic and private partners.
Additionally, during fiscal year 2013, DiagnoCure continued to strengthen its overall intellectual property portfolio. Six more patents were obtained supporting the PCA3 biomarker. The Corporation was also granted a patent from the European Patent Office (EPO), providing exclusive rights through February 2030 regarding use of the GCC marker to gain prognostic information based on the tumor burden measured at the molecular level in lymph nodes.
Dr. Yves Fradet, Chairman of the Board, stated, "DiagnoCure's board of directors is satisfied with the thorough analysis of all opportunities and the actions undertaken in the recent months. We strongly believe in the potential of PCA3 and have applied all required resources to provoke significant change."
"During the last quarter, DiagnoCure has evaluated several scenarios aimed at increasing shareholder value, including transformational acquisitions. The Corporation also has and will continue to pursue all opportunities relating to enhancing PCA3 market penetration. Shareholders can be assured that every effort is being made to preserve cash while maintaining the Corporation's ability to seize and implement opportunities with our qualified team." added Dr. Vincent Zurawski, Lead Director of the Corporation.
Results for the Fiscal Year Ended October 31, 2013
Total revenues for fiscal year 2013 were $671,228 compared with $2,472,038 for 2012. This decrease of $1,800,810 is attributable to the termination, on January 11, 2013 of the development and license agreements signed in June 2011 with Signal Genetics. That development agreement provided $1,223,485 of revenues in fiscal year 2012. The remaining decrease is attributable to the payment of $626,401 made by Gen-Probe in relation to the FDA milestone reached for PROGENSA® PCA3 in fiscal year 2012. In 2013, royalty revenues from Hologic Gen-Probe increased by $83,613, or 14%, to $671,228, from $587,615 for 2012. This increase is attributable to an increase in sales of 45% in the U.S. market amid challenges in the reimbursement environment for molecular diagnostic tests, offset by a decrease of 30% in the European market.
Operating expenses decreased by $1,913,192, to $4,238,170 for fiscal year 2013 from $6,151,362 for fiscal year 2012. This decrease is mainly attributable to the development agreement performed in fiscal year 2012 in support to the PrevistageTM GCC Colorectal Cancer Staging Test and to an allowance for doubtful accounts of $507,092 related to the Signal Genetics development agreement. Based on the above, for fiscal year 2013, DiagnoCure recorded a net loss of $3,566,942 or $0.08 per share, compared with $3,679,324 or $0.09 per share for fiscal year 2012.
Results of the Fourth Quarter 2013
Total revenues for the fourth quarter of 2013 were $149,465 compared to $142,995 for the same period of 2012. This increase of $6,470 is attributable to royalty revenues from Hologic Gen-Probe. In the fourth quarter of 2013, royalty revenues from Hologic Gen-Probe increased by $6,470 attributable to an increase of 12% in the U.S. market amidst challenges in the reimbursement environment for molecular diagnostic tests, offset by a decrease of 9% in the European market.
Operating expenses decreased by $637,786, to $1,483,564 for the fourth quarter of 2013, from $2,121,350 for the same quarter of 2012. This decrease is attributable to the termination of the R&D services performed in support to the PrevistageTM GCC Colorectal Cancer Staging Test and to an impairment charge of $440,693 for the fourth quarter of 2013 compared to $650,000 in the fourth quarter of 2012 attributable to a re-evaluation of the Shc intangible asset. Based on the above, for the fourth quarter of 2013, DiagnoCure recorded a net loss of $1,334,099 or $0.03 per share, compared with $1,978,355 or $0.05 per share, for the same period of 2012.
|For the periods of||Three months ended|
|Revenue under research agreement||1,223,485|
|Revenue under license and royalty agreement||149,465||142,995||671,228||1,248,553|
|Operating expenses (before stock-based compensation, depreciation, amortization and impairment)||787,036||1,191,988||2,800,532||4,356,094|
|Net loss (before stock-based compensation, depreciation, amortization and impairment)||(637,571)||(1,048,993)||(2,129,304)||(1,884,056)|
|Depreciation of property, plant and equipment||15,403||24,019||69,908||118,578|
|Amortization of intangible asset||200,021||211,987||798,921||846,977|
|Impairment of intangible asset||440,693||650,000||440,693||650,000|
|Basic and diluted net loss per share||(0.03)||(0.05)||(0.08)||(0.09)|
|Weighted average number of common shares outstanding||43,040,471||43,029,037||43,040,471||43,029,037|
Consolidated Balance Sheets
|As of October 31|
|Cash, temporary and long-term investments||4,190,296||5,824,771|
|Number of common Shares outstanding||43,040,471||43,040,471|
DiagnoCure's management will host a conference call at 4:30 p.m. (ET) on January 16, 2014. Interested participants may listen to the call by dialing 1-888-390-0546 or 514-225-6995 and referencing code 50137031 approximately 15 minutes prior to the call. The Corporation will also provide a live webcast of the call. Interested participants may access the webcast on DiagnoCure's website at www.diagnocure.com, through a link on the Investors page - Presentations. A replay of the webcast will be available on DiagnoCure's website for those unable to participate in the live webcast.
Next annual meeting
At the next shareholders meeting to be held on April 17, 2014, the shareholders of the Corporation will be asked to reconfirm the Corporation's existing shareholder rights plan (the "Shareholder Rights Plan"). The Shareholder Rights Plan was originally ratified by the shareholders of the Corporation at the annual and special meeting of shareholders held on March 11, 2011. The purpose of the Shareholder Rights Plan is to provide adequate time for shareholders to properly assess the merits of a takeover bid for the Corporation without undue pressure and to provide the Board of Directors with the opportunity to explore and develop alternatives to a takeover bid that are in the best interests of the Corporation. The Shareholder Rights Plan is set to expire upon the conclusion of the annual meeting of shareholders of the Corporation in 2020, subject to reconfirmation by shareholders in 2014 and 2017. The full text of the Shareholder Rights Plan is available on SEDAR at www.sedar.com.
Update on PCA3
As the field of prostate cancer is moving toward more integrated risk assessment to decide whether a prostate biopsy is necessary, DiagnoCure is pleased to report that many studies continue to examine the role of the urinary PCA3 score in conjunction with other urinary markers to enhance the specificity of screening and reduce unnecessary biopsies. In 2013 alone, DiagnoCure has monitored more than 54 new clinical publications describing PCA3, which brings the total of papers on PCA3 to nearly 250. Among those published in 2013, at least two confirm the utility of PCA3 to predict the outcome of a biopsy in men who have had a prior negative biopsy, while about 16 demonstrate that PCA3 could also be useful in allowing discrimination between indolent and aggressive prostate cancer.
Interestingly, some studies in diverse populations from around the world have also demonstrated that urinary PCA3 scores could predict the presence of prostate cancer prior to an initial prostate biopsy. At least six different studies performed on more than 6,000 men support this outcome, some even providing evidence that a higher PCA3 score correlates with aggressive disease and a high Gleason score. It is also interesting to note that the relationship of PCA3 to disease volume and grade is currently the object of studies in men enrolled in prospective active surveillance programs. For example, the Canary PASS study of prostate cancer patients under active surveillance, provides preliminary evidence that PCA3 allows discrimination between men at risk of aggressive cancer and those who could be placed on less intensive surveillance protocols with fewer repeated prostate biopsies, reducing the risks and costs of invasive procedures.
DiagnoCure (TSX: CUR; OTCQX: DGCRF) is a life sciences corporation that develops and commercializes high-value cancer diagnostic tests that increase clinician and patient confidence in making critical treatment decisions. In 2008, the Corporation launched a colorectal cancer staging test through its U.S. CLIA laboratory. PrevistageTM GCC is currently available for licensing. The Corporation has granted a worldwide exclusive license on the diagnostic applications of its proprietary molecular biomarker PCA3 to Gen-Probe, now a wholly-owned subsidiary of Hologic Inc. Hologic Gen-Probe's PROGENSA® PCA3 prostate cancer test is commercialized in Europe under CE mark and is approved for commercialization in Canada and the United States. For more information, please visit www.diagnocure.com.
This release may contain forwardlooking statements that involve known and unknown risks, uncertainties and assumptions that may cause actual results to differ materially from those expected. Forward-looking statements can be identified by the use of the conditional or forward-looking terminology such as "anticipates", "assumes", "believes", "estimates", "expects", "intend", "may", "plans", "projects", "should", "will", or the negative thereof or other variations thereon. Forward-looking statements also include any other statements that do not refer to historical facts. All such forward-looking statements are made pursuant to the "safe-harbour" provisions of applicable Canadian securities laws. By their very nature, forwardlooking statements are based on expectations and hypotheses and also involve risks and uncertainties, known and unknown, many of which are beyond DiagnoCure's control. Forward-looking statements are presented for the purpose of assisting investors and others in understanding certain key elements of the Corporation's current objectives, strategic priorities, expectations and plans, and in obtaining a better understanding of the Corporation's business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes and that they should not place undue reliance on these forwardlooking statements. For instance, any forward-looking statements regarding the outcome of research and development projects, clinical studies and future revenues, including those related to PROGENSA® PCA3, are based on management expectations and such outcome may vary materially depending on global political and economic conditions, dependence on collaboration partners, uncertainty of healthcare reimbursement, and marketing and distribution challenges. In addition, the reader is referred to the applicable general risks and uncertainties described in DiagnoCure's most recent Annual Information Form under the heading "Risk Factors". DiagnoCure undertakes no obligation to publicly update or revise any forwardlooking statements contained herein unless required by the applicable securities laws and regulations.
SOURCE DiagnoCure inc.
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