TORONTO, March 8 /PRNewswire-FirstCall/ - ChondroGene Limited announced its financial results today for the fourth quarter and year ended December 31, 2005.
For the fourth quarter of 2005, ChondroGene reported revenues of $2,070,367 compared to revenues of $1,560,119 for the fourth quarter of 2004. The net income for the quarter was $246,084 or $0.01 per share, compared to a net loss of $422,071 or $0.01 per share for the quarter ended December 31, 2004.
ChondroGene reported revenues of $5,338,478 for the year ended December 31, 2005, compared to revenues of $2,226,807 for the year ended December 31, 2004. Revenues for the year were attributable to the research collaboration with Pfizer Inc . The net loss for the year was $3,075,107 or $0.08 per share, compared to a net loss of $5,617,146 or $0.16 per share for the year ended December 31, 2004. As of December 31, 2005, the Company had $4,680,882 in cash and cash equivalents.
"The strength of our Sentinel Principle(TM) technology is the ability to use simple blood samples as the basis for developing and validating highly sensitive and specific molecular tests. Blood-based testing is safe, easy and encourages compliance. We can use our Sentinel Principle platform to quickly and economically identify biomarker sets to develop affordable and flexible tests that run on standardized instrumentation," stated K. Wayne Marshall, MD, PhD, President & CEO of ChondroGene. "We made significant progress during the year in identifying specific biomarker sets for our initial products in colon cancer and prostate cancer. Our ColonSentry(TM) test, which is being developed to detect colon cancer and pre-cancerous polyps, has demonstrated very exciting preliminary results and is currently undergoing additional clinical testing."
2005 Highlights --------------- Test Development ---------------- - During the year, the Company focussed its attention on developing tests for specific cancers. We are currently validating a blood-based test, ColonSentry, for detecting colon cancer and pre-cancerous polyps. The Company collected over 2,500 samples from patients undergoing colonoscopy for use in the research and development of the test. - ChondroGene also continued development of a prostate cancer test with the collection of over 500 samples from patients with elevated PSA levels scheduled for prostate biopsy. The ProstateSentry(TM) test is being developed to detect prostate cancer. Collaborations -------------- - ChondroGene entered into a new research collaboration with Pfizer in December of 2004 to continue the work that was begun in the first collaboration. ChondroGene completed the required milestones during 2005 and expects to fulfil the remaining milestones by the completion of the current collaboration in October 2006. Talks will be initiated with Pfizer mid-year regarding possible new collaborations. - The Company entered into an agreement with the Division of Research of the Permanente Medical Group of Northern California in October, to jointly develop a research database infrastructure that will be used for genomic research. The Permanente Medical Group of Northern California is one of eight multi-specialty physician groups that are part of Kaiser Permanente, America's leading integrated health care organization with over 8.3 million members in nine states. ChondroGene expects to enter into other collaborations with Kaiser in the future in specific disease areas. - In August, ChondroGene entered into an alliance with the University of California, San Francisco (UCSF) that provides a framework for ChondroGene to enter into collaborations with UCSF scientific researchers and clinicians in applying the Sentinel Principle to new diagnostic and therapeutic uses in a range of diseases. It is expected that the Company will enter into a number of agreements with specific collaborators during the current year. - ChondroGene entered into collaborations with 2 Malaysian hospitals - Lam Wah Ee Hospital and Island Hospital, two leading hospitals in Penang, Malaysia. Initially the hospitals will collect blood samples from patients with diseases of interest to ChondroGene and eventually will offer ChondroGene's tests as they become available. Publications ------------ - Four major scientific papers were published during the year: 1. "Assessing the Validity of Blood-Based Gene Expression Profiles for the Classification of Schizophrenia and Bipolar Disorder: A preliminary Report" in the American Journal of Medical Genetics Part B: Neuropsychiatric Genetics; 2. Blood-based biomarkers for detecting mild osteoarthritis in the human knee" in the October issue of the journal Osteoarthritis and Cartilage; 3. Comparative gene expression analysis of blood and brain provides concurrent validation of SELENBP1 up-regulation in schizophrenia" was published in the October 25th issue of the Proceedings of the National Academy of Sciences of the United States of America (PNAS); 4. Gene Expression Profiling in Blood Cells Reveals Novel Biomarkers of Human Urinary Bladder Cancer" was presented at the American Society of Clinical Oncology (ASCO) meeting on May 16, 2005. Other ----- - Dr. Daniel H. Farkas joined the Company in December as Vice President, Clinical Diagnostics. Dr. Farkas will work to identify applications for the Company's Sentinel Principle, develop clinical and commercial opportunities for the Company's products and assist in the Company's regulatory strategy development and implementation. - Subsequent to year end, Loewen, Ondaatje, McCutcheon Limited initiated research coverage on ChondroGene. - In March, the Company received funding support form National Council of Canada's Industrial Research Assistance program (NRC-IRAP) to assist in the identification and development of biomarkers for use in detecting and staging osteoarthritis using a blood sample. The work is expected to be completed in Q1/06 at which time the Company will explore opportunities for commercializing the results. About ChondroGene -----------------
ChondroGene is focussed on the application of functional genomics to enable early diagnosis and personalized therapeutic intervention based on disease-specific biomarkers. The Company has developed a novel approach, the Sentinel Principle, to detect and stage virtually any disease or medical condition from a simple blood sample. ChondroGene is currently applying the Sentinel Principle in major areas with unmet clinical needs such as cancer, arthritis, cardiovascular disease and neurological disorders. For more information on ChondroGene, visit www.chondrogene.com.
This press release contains forward-looking statements, which reflect the Company's current expectations regarding future events. The forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein. Investors should consult the Company's ongoing quarterly filings and annual reports for additional information on risks and uncertainties relating to these forward-looking statements. The reader is cautioned not to rely on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release. (Financial statements follow.) ChondroGene Limited Consolidated Balance Sheets Amounts in Canadian dollars ------------------------------------------------------------------------- December 31 December 31 2005 2004 ------------------------------------------------------------------------- ASSETS Current assets: Cash and cash equivalents $ 4,680,882 $ 6,381,870 Accounts receivable 1,356,392 5,520,470 Investment tax credits recoverable 1,254,922 800,000 Prepaid expenses and deposits 365,715 277,563 ----------------------------------------------------------------------- 7,657,911 12,979,903 Capital assets 1,251,014 1,098,080 Intellectual property 1,284,675 1,726,823 ------------------------------------------------------------------------- $ 10,193,600 $ 15,804,806 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES and SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 929,837 $ 1,332,356 Deferred revenue 2,134,361 4,860,274 Current portion of long term debt 139,427 123,869 ----------------------------------------------------------------------- 3,203,625 6,316,499 Long term debt 102,549 241,976 Shareholders' equity: Capital stock 20,138,831 20,021,789 Contributed surplus 1,527,007 927,847 Deficit (14,778,412) (11,703,305) ----------------------------------------------------------------------- 6,887,426 9,246,331 ------------------------------------------------------------------------- $ 10,193,600 $ 15,804,806 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ChondroGene Limited Consolidated Statements of Operations and Deficit Amounts in Canadian dollars ------------------------------------------------------------------------- 3 months 3 months Year Year ended ended ended ended December 31 December 31 December 31 December 31 2005 2004 2005 2004 ------------------------------------------------------------------------- Revenue Milestones $ 1,184,650 $ 1,264,000 $ 1,797,250 $ 1,264,000 Fees for service 199,026 214,015 816,855 880,703 One-time payment 686,691 82,104 2,724,373 82,104 ----------------------------------------------------------------------- 2,070,367 1,560,119 5,338,478 2,226,807 Expenses Research and development 1,186,372 1,264,544 5,884,270 5,494,629 General and administrative 418,763 448,990 1,629,323 1,253,770 Stock compensation 138,550 181,865 599,160 713,967 Amortization of intellectual property 110,538 110,541 442,148 442,154 Interest on long term debt 7,442 11,268 35,316 15,731 ----------------------------------------------------------------------- 1,861,665 2,017,208 8,590,217 7,920,251 Interest income 37,382 35,018 176,632 76,298 ------------------------------------------------------------------------- Net income (loss) for the period 246,084 (422,071) (3,075,107) (5,617,146) Deficit, beginning of period (15,024,496) (11,281,234) (11,703,305) (6,086,159) . ------------------------------------------------------------------------- Deficit, end of period $(14,778,412) $(11,703,305) $(14,778,412) $(11,703,305) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net income (loss) per common share Basic and fully diluted $ 0.01 $ (0.01) $ (0.08) $ (0.16) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Weighted average number of common shares outstanding Basic 39,504,397 39,247,291 39,417,576 35,416,578 Fully diluted 44,148,476 39,247,291 39,417,576 35,416,578 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ChondroGene Limited Consolidated Statements of Cash Flows Amounts in Canadian dollars ------------------------------------------------------------------------- 3 months 3 months Year Year ended ended ended ended December 31 December 31 December 31 December 31 2005 2004 2005 2004 ------------------------------------------------------------------------- Cash flows provided by (used in): Operations: Net loss for the period $ 246,084 $ (422,071) $ (3,075,107) $ (5,617,146) Items therein not requiring cash Stock based compensation 138,550 181,865 599,160 713,967 Amortization of capital assets 81,155 86,849 322,725 314,182 Amortization of intellectual property 110,538 110,541 442,148 442,154 --------------------------------------------------------------------- 576,327 (42,816) (1,711,074) (4,146,843) Changes in non-cash working capital: Accounts receivable (1,298,406) (5,470,060) 4,164,078 (4,074,874) Investment tax credit recoverable (454,922) (200,000) (454,922) (200,000) Prepaid expenses and deposits 142,996 (143,211) (88,152) (60,361) Accounts payable and accrued liabilities (114,012) 176,337 (402,519) 660,067 Deferred revenue (687,368) 4,834,885 (2,725,913) 4,835,147 ----------------------------------------------------------------------- (1,835,385) (844,865) (1,218,502) (2,986,864) Financing: Net proceeds from issue of capital stock - 36,600 117,042 6,706,076 Proceeds for issue of long-term debt - - - 403,983 Payments on long-term debt (32,354) (28,528) (123,869) (38,138) ----------------------------------------------------------------------- (32,354) 8,072 (6,827) 7,071,921 Investments: Additions to capital assets (132,136) (96,307) (475,659) (267,536) ----------------------------------------------------------------------- Decrease in cash and cash equivalents (1,999,875) (933,100) (1,700,988) 3,817,521 Cash and cash equivalents, beginning of period 6,680,757 7,314,970 6,381,870 2,564,349 ------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 4,680,882 $ 6,381,870 $ 4,680,882 $ 6,381,870 ------------------------------------------------------------------------- -------------------------------------------------------------------------
ChondroGene LimitedCONTACT: Dr. K. Wayne Marshall, President & CEO, (416) 650-0060 x234,wmarshall@chondrogene.com; Bruno Maruzzo, Corporate Development, (416)650-0060 x237, bmaruzzo@chondrogene.com
