TORONTO, ONTARIO--(Marketwire - November 15, 2010) - GeneNews Limited (TSX: GEN), a company focused on developing blood-based biomarker tests for the early detection of diseases and personalized health management, today reported operational and financial results for the three- and nine-months ended September 30, 2010. In addition, it reported on several important events for the company that happened subsequent to the quarter-end.
Events Subsequent to Quarter-End:
-- Submission of ColonSentry™ validation data package to New York State
health regulatory authorities by Enzo Clinical Labs (NYSE: ENZ)
-- Completion of two concurrent private placement offerings for total gross
proceeds of approximately $2.1 million
-- Seed capital grant of approximately $600,000 (MYR 1,876,000) from the
Malaysia Biotech Corp. to the company's commercialization partner,
GeneNews Diagnostics, to support ColonSentry™ commercialization in
Malaysia and Southeast Asia
"The completion of the recent financing transactions combined with the seed capital grant to our Malaysian partner puts us in a stronger position to broaden the global commercial footprint of ColonSentry™ and to engage with potential strategic partners to expand the application of our Sentinel Principle® technology. We appreciate the vote of confidence from investors as we look forward to the commercial launch of ColonSentry™ in the United States, China and Malaysia in the coming months," said Gailina J. Liew, President and Chief Operating Officer of GeneNews.
Commenting on the ColonSentry™ submission to the New York State health regulatory authorities, Enzo Clinical Labs' President, Dr. Kevin Krenitsky, said, "Offering first-in-class tests such as ColonSentry™ is a central component of Enzo's strategy of bringing leading edge, world-class molecular tests to our customers. This submission brings us one step closer to being able to provide the people of New York State with access to this groundbreaking test, the world's first blood-based test for colorectal cancer."
Third Quarter Highlights:
-- Presentation of positive ColonSentry™ validation data from a 786-
cohort study entitled "Blood RNA Biomarker Detects Both Left- and Right-
sided Colorectal Neoplasms" at the at the Next Generation Dx Summit,
Washington, DC August 24-26.
-- Approval of approximately $1,665,000 (MYR 5,000,000) grant from the
Government of Malaysia to support the identification and development of
blood-based biomarkers for liver cancer and hepatitis B
Financial Results:
For the three months ended September 30, 2010, the Company reported a consolidated net loss of $1,051,719, or $0.02 loss per common share, as compared to a consolidated net loss of $1,405,458, or $0.02 loss per common share for the three months ended September 30, 2009. For the nine months ended September 30, 2010, the Company reported a consolidated net loss of $3,780,855, or $0.06 loss per common share, as compared to a consolidated net loss of $5,130,215, or $0.09 loss per common share, for the nine months ended September 30, 2009. This year-to-date improved financial performance is primarily due to a 36% reduction in research and development costs that resulted from reductions in the number of scientific and technical staff needed to support the Company's ColonSentry™ test service through its Canadian operations.
As at September 30, 2010, the Company's unrestricted cash, cash equivalents and short-term investments amounted to $827,590. The Company noted that this amount does not include any of the aforementioned total gross proceeds from the approximately $2.1 million financing that it announced on November 10, 2010.
The Company's financial statements and management's discussion and analysis are available on www.sedar.com.
About GeneNews
GeneNews is an emerging molecular diagnostics company focused on the application of functional genomics to enable early diagnosis and personalized health management based on disease-specific biomarkers. The Company has a patented core platform technology, the Sentinel Principle®, which has the power to detect and stage virtually any disease or medical condition from a simple blood sample. GeneNews is currently applying the Sentinel Principle® in major areas with unmet clinical needs such as cancer, arthritis, cardiovascular disease and neurological disorders. GeneNews launched its first commercial product, ColonSentry™, a blood-based test to pre-screen and assess an individual's risk for colorectal cancer, in Canada in 2008. The Company's marketing partners, GeneDiagnostics and Enzo Clinical Labs, are expected to launch the ColonSentry™ test in China and the United States in the fourth quarter of 2010 and the first half of 2011, respectively. For more information on GeneNews and ColonSentry™, www.genenews.com or www.ColonSentry.com.
Forward-Looking Statements
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.
GeneNews Limited
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Expressed in Canadian dollars)
As at
September 30, December 31,
2010 2009
$ $
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ASSETS
Current
Cash and cash equivalents 477,510 510,806
Cash held in trust - 2,286,200
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477,510 2,797,006
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Restricted cash 485,691 252,054
Short-term investments 350,080 91,710
Accounts receivable 52,112 293,528
Investment tax credits recoverable - 400,000
Prepaid expenses and deposits 116,495 126,505
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Total current assets 1,481,888 3,960,803
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Property, plant and equipment, net 2,266,962 2,698,450
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3,748,850 6,659,253
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 871,553 1,159,141
Deferred revenue 1,500 10,200
Deferred grant 222,941 -
Current portion of long-term debt 87,701 82,690
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Total current liabilities 1,183,695 1,252,031
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Convertible debentures 3,078,065 2,662,677
Long-term debt 70,441 136,858
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Total liabilities 4,332,201 4,051,566
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Subsequent event
Commitments
Shareholders' equity
Capital stock 48,752,731 48,752,731
Warrants 1,020,486 1,020,486
Contributed surplus 5,537,789 4,947,972
Deficit (55,894,357) (52,113,502)
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Total shareholders' (deficit) equity (583,351) 2,607,687
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3,748,850 6,659,253
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GeneNews Limited
CONSOLIDATED STATEMENTS OF OPERATIONS, COMPREHENSIVE LOSS
AND DEFICIT
(Unaudited)
(Expressed in Canadian dollars)
Three months Three months Nine months Nine months
ended ended ended ended
September 30, September 30, September 30, September 30,
2010 2009 2010 2009
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REVENUE
Milestone
revenue $ - $ 34,430 $ - $ 131,174
Non-refundable
license
revenue 162,619 311,684 176,604 566,144
Sales 3,896 16,850 13,371 38,100
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166,515 362,964 189,975 735,418
EXPENSES
Research and
development 414,966 613,540 1,408,404 2,214,103
Sales and
marketing 29,089 145,187 117,071 415,750
General and
administrative 345,293 368,308 1,024,291 1,357,067
Stock-based
compensation 164,353 371,585 589,817 962,040
Amortization
of property,
plant and
equipment 146,773 138,275 440,488 530,760
Foreign
exchange
(gain) loss (20,836) 5,238 (30,363) 23,108
Interest on
long term
debt 141,849 127,372 426,754 376,779
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1,221,487 1,769,505 3,976,462 5,879,607
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Interest income 3,253 1,083 5,632 13,974
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Net and
comprehensive
loss for the
period (1,051,719) (1,405,458) (3,780,855) (5,130,215)
Deficit,
beginning of
period (54,842,638) (50,244,390) (52,113,502) (46,519,633)
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Deficit, end of
period $ (55,894,357) $(51,649,848) $(55,894,357) $(51,649,848)
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Net and
comprehensive
loss per
common share
Basic and
fully diluted $ (0.02) $ (0.02) $ (0.06) $ (0.09)
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Weighted
average number
of common
shares
outstanding
Basic and
fully diluted 69,027,881 62,687,251 69,027,881 58,176,297
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Contacts:
Company Contact:
Gailina Liew
President & COO
Office: (905) 739-2036 or Mobile: (416) 844-0649
gliew@genenews.com
Investor Contact:
Kilmer Lucas Inc.
Stephen Kilmer
Office: (905) 690-2400 X21
stephen@kilmerlucas.com
Media Contact:
Kilmer Lucas Inc.
Leonard Zehr
Office: (905) 690-2400 X41
len@kilmerlucas.com
