QUEBEC CITY, March 16 /PRNewswire-FirstCall/ - DiagnoCure Inc. , a leading developer and provider of innovative high-value cell-based assays and molecular diagnostics for the early detection of cancers, today announced its financial results for the first quarter ended January 31, 2006.
Highlights of the Quarter
In December 2005, Gen-Probe introduced its PCA3 APTIMA prostate cancer assay in its ASR format to targeted laboratories in the US, “seeding” the market as they have termed it. DiagnoCure expects to receive its first royalty payments from Gen-Probe PCA3 APTIMA tests sales in the current fiscal year.
Also in December 2005, the Company announced the formation of a Lung Cancer Strategic Advisory board (LCSAB) bringing to DiagnoCure access to valued counsel from clinicians and researchers with international recognition in their respective fields. This committee met for the first time on December 8, 2005. The purpose of the LCSAB is to help guide the Company’s technical and strategic decisions relative to its research and development of lung cancer diagnostics, which the Company believes will be of key importance to its continuing success. With the input obtained from LCSAB members and giving consideration to the recent acquisition, announced in October 2005, of the rights to a number of new lung cancer markers from Genzyme Corporation, DiagnoCure intends to refine the direction of its lung cancer program during the coming year, including exploring additional applications of these molecular markers for lung cancer detection using other testing medium such as blood, sputum, or biopsy materials.
Further in support of our PCA3 development initiatives and those of Gen-Probe, we were very pleased to announce on March 7, 2006 that the United States Patent and Trademark Office (USPTO) had granted a first patent on PCA3, DiagnoCure’s highly prostate-cancer specific gene. US patent 7,008,765 “PCA3, PCA3 genes and methods of use” is at the forefront of a series of patent applications covering PCA3, its structure and its role in the diagnosis, prognosis and therapy of prostate cancer. The issuance of this patent strengthens our intellectual property portfolio and increases the value of the PCA3 technology.
DiagnoCure remains deeply committed to the belief that winning the battle against cancer will require accurate and early diagnosis. Our operations and research and development program continue to support that commitment.
Results of the First Quarter of Fiscal 2006
Total revenues for the first quarter of 2006 were $1,519,613 compared with $1,783,252 for the first quarter of 2005. Revenue recognition of the continued calendar payments from Gen-Probe were $739,107 for the period, down $75,758 from the prior year due to unfavourable changes in the US to Canadian foreign currency exchange rates. Sales of DiagnoCure’s non-invasive bladder cancer test, ImmunoCyt(TM) / uCyt+(TM) were relatively stable at $102,642 for the first quarter of 2006 versus $104,332 for the same period a year ago. Sales of DiagnoCure developed uPM3(TM) ASR prostate cancer test for the first quarter of 2006 were $165,429 compared to $175,761 for the same period of 2005. This decrease reflects the beginning of the transition to Gen-Probe’s assay, PCA3 APTIMA ASR test that, as noted above, was introduced to the US market in December 2005. uPM3(TM) will slowly be withdrawn from the market as the new market develops for the Gen-Probe PCA3 APTIMA assay.
The sales of our subsidiary Samba Technologies SAS were $114,291 for the first quarter of 2006 compared to $253,066 a year ago. Samba products and services, image analysis, archival and transmission software and hardware, can often have a long or erratic sales cycle and while first quarter revenues were below those of the same period last year, the pipeline for fiscal 2006 remains positive.
Operating expenses rose by $863,389, from $2,050,206 for the first quarter of 2005 to $2,913,595 for the same period in 2006. This increase is substantially attributable to increased research & development spending in line with our R&D program and an increase in professional fees (legal and investor relations), higher regulatory and filing fees and an increase in the number of administrative employees, including the full effect of the 2005 hiring of new CFO and Director of HR & Operations.
Based on the above, for the first quarter of 2006, DiagnoCure recorded a net loss of $1,698,648 or $0.05 per share, compared with $607,607, or $0.02 per share, for the first quarter of 2005. These results are in line with management expectations. As was disclosed in the “Use of Proceeds” relative to our July 2004 financing, the Company anticipated significantly increasing its ongoing investment in research and development activities and related staff and administrative expenses incurred as our Company grows. Those investments in the Company’s future success impact on its current bottom line results.
“DiagnoCure continues to grow and perform to our expectation and in line with our business plan”, said Pierre Desy, President and CEO. “Our relationship with Gen-Probe continues to be productive and with their December 2005 introduction of the ASR version of the PCA3 APTIMA assay in the US and plans for a European introduction in 2006, the prognosis remains very positive. In addition, DiagnoCure continues to develop its own portfolio with on-going work on the development of tests for the detection of breast, and lung cancer while we continue to review potential partnership and M&A opportunities.”
At the end of the quarter, cash, short-term investments and long-term investments stood at $24,102,114, up from $22,721,705 as at October 31, 2005. Management is satisfied that it has adequate cash resources to execute its business plan in the near-term and mid-term. More detailed comments can be found in the Company’s quarterly report and Management Discussion & Analysis filed on SEDAR.
<< Financial Data ------------------------------------------------------------------------- For the periods of Three-month ended January 31 ------------------------------ 2006 2005 ------------------------------------------------------------------------- Sales 449,018 533,159 ------------------------------------------------------------------------- Revenue under research and license agreement 877,596 1,043,746 ------------------------------------------------------------------------- Interest 192,999 206,347 ------------------------------------------------------------------------- Total revenues 1,519,613 1,783,252 ------------------------------------------------------------------------- Cost of sales (304,666) (340,653) ------------------------------------------------------------------------- Gross margin 1,214,947 1,442,599 ------------------------------------------------------------------------- Operating expenses(x) 2,913,595 2,050,206 ------------------------------------------------------------------------- Net loss(x) (1,698,648) (607,607) ------------------------------------------------------------------------- Basic and diluted loss per share (0.05) (0.02) ------------------------------------------------------------------------- Weighted average number of common shares outstanding 34,358,256 34,190,451 ------------------------------------------------------------------------- (x)Includes non-cash expense for stock-based compensation 283,393 332,563 ------------------------------------------------------------------------- Consolidated Balance Sheets ------------------------------------------------------------------------- As at January 31 As at October 31 ------------------------------------- 2006 2005 ------------------------------------------------------------------------- Cash, cash equivalents, temporary and long-term investments 24,102,114 22,721,705 ------------------------------------------------------------------------- Total assets 27,110,312 26,895,639 ------------------------------------------------------------------------- Shareholders’ equity 23,990,725 25,313,138 ------------------------------------------------------------------------- >> About DiagnoCure
DiagnoCure specializes in the development, production and commercialization of diagnostic tests for the early detection of cancers. DiagnoCure’s first product, ImmunoCyt(TM) /uCyt+(TM), is an important tool for the diagnosis and monitoring of bladder cancer. In 2003, the Company completed the development of uPM3(TM), a non-invasive test for the early detection of prostate cancer, and granted an exclusive worldwide license for the use of the PCA3 technology in prostate cancer diagnosis to Gen-Probe . In 2004, the Company launched a first version of its automated microscopy workstation that screens, performs image analysis, reports and archives data and images. After successfully completing a lung cancer pilot study on bronchial aspirates, and having signed a license agreement with Genzyme Corp. for the exclusive rights to a bank of molecular markers in lung cancer, DiagnoCure is now exploring additional applications for lung cancer detection using other testing media such as blood, sputum, or biopsy materials. The Company is continuing the validation of markers for integration into a prototype test for the early detection of kidney cancer and just initiated a program on breast cancer. DiagnoCure is headquartered in Quebec City, Canada. Additional information can be found at www.diagnocure.com.
Forward-looking statements
This release contains forward-looking statements that may cause actual results to differ materially from those expected. By their very nature, forward-looking statements are based on expectations and hypothesis and also involve risks and uncertainties, known and unknown, many of which are beyond DiagnoCure’s control. As a result, investors are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements regarding the outcome of research and development projects and future revenues are based on management expectations. In addition, the reader is referred to the applicable general risks and uncertainties described in DiagnoCure’s most recent Annual Information Form under heading “Risk Factors”. DiagnoCure undertakes no obligation to publicly update or revise any forward-looking statements contained herein.
DIAGNOCURE INC.
CONTACT: Thom Skinner, DiagnoCure Inc., Chief Financial Officer, (418)527-6100, communications@diagnocure.com
