TORONTO, Nov. 14 /PRNewswire-FirstCall/ - Predictive medicine company PreMD Inc. announced today results for the third quarter of fiscal 2007, ending September 30, 2007 (“Q3 2007").
“We are very pleased with the progress we have made during the third quarter of fiscal 2007 through the implementation of our strategy and development initiatives,” said Dr. Brent Norton, president and CEO of PreMD Inc. “We continue to work with AstraZeneca regarding the planned marketing and distribution of our skin cholesterol product in the United States and are actively negotiating alliances with other organizations in different markets for our products. We are currently pursuing commercialization opportunities for PREVU(x)LT in the life insurance industry, which has garnered interest in Canada, the United States and Europe. In addition, we have exciting new prospects in the cosmetics field which expands the potential of our skin cholesterol franchise. This opportunity is currently in negotiations with a leading cosmetics company.”
Dr. Norton continued “We have also made advancements with the US Food and Drug Administration (FDA) regarding our expanded regulatory claim on our skin cholesterol test. We are actively working with the agency to ensure all processes are precisely met and have submitted detailed answers to the questions asked. We anticipate hearing a response, which could be in the form of additional questions, in the coming weeks. On the clinical front, we are very excited by the recent data from our PASA study, which is included with our submission to the FDA. The data was recently presented at the AHA conference and is scheduled for publication in April 2008 in the American Journal of Cardiology. We also had further clinical validation with our cancer portfolio, with our breast cancer data being accepted for presentation at the San Antonio Breast Cancer Symposium.”
“Going forward, we anticipate building near-term revenues through these exciting new partnership opportunities and sales, royalty and milestone payments from our skin cholesterol product. PreMD remains deeply committed to the belief that winning the battle against diseases such as cardiovascular and cancer can be prevented if taken the necessary precautionary steps. Our operations and research and development program continues to support that commitment to predictive medicine technology, especially as we explore other avenues to make our innovative products available.”
Financial Review
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The consolidated net loss for the three months ended September 30, 2007 (Q3 2007) was $1,635,000 or $(0.07) per share compared with a loss of $1,120,000 or $(0.05) per share for the quarter ended Q3 2006.
Total product sales were $7,000 for Q3 2007 compared with $1,000 for Q3 2006. License revenue was $27,000 Q3 2007, compared to $577,000 for Q3 2007.
During Q3 2007, the Company focused on managing the cancer clinical trial program and on validation of the contract manufacturing for the PREVU(x) system. Most of the skin cholesterol clinical trials were completed at the end of 2006. As a result, research and development expenditures for the quarter decreased by $104,000 to $737,000 from $841,000 in Q3 2006. The variance for the period reflects:
General and administration expenses amounted to $995,000 for Q3 2007 compared with $499,000 in Q3 2006, an increase of $496,000. The increase for the quarter includes:
Interest on convertible debentures (issued on August 30, 2005) amounted to $167,000 in Q3 2007 compared with $172,000 in Q3 2006. The debentures bear interest at an annual rate of 7%, payable quarterly in either cash or stock. Imputed interest of $253,000 and $204,000 in Q3 2007 and 2006 respectively, represent the expense related to the accretion of the liability component, at an effective interest rate of 14.8%. Effective January 1, 2007, amortization of the deferred financing fees is included in imputed interest whereas it was included in amortization expenses in 2006.
Amortization expenses for Q3 2007 amounted to $42,000 compared with $78,000 for Q3 2006.
The gain on foreign exchange was $533,000 for Q3 2007, compared with a loss of $5,000 for Q3 2006. The major contributing factor for the increase was the impact of foreign exchange rates on the convertible debentures which are repayable in U.S. dollars.
Interest income amounted to $32,000 for Q3 2007 compared with $56,000 for Q3 2006 as a result of lower cash balances. Refundable scientific investment tax credits (“ITCs”) accrued for Q3 2007 amounted to $54,000 versus $45,000 for Q3 2006. This increase was due to increased salaries related to product development in 2007.
Accounts payable at September 30, 2007 amounted to $366,000 compared with $964,000 at December 31, 2006. The large decrease resulted from the payment of expenses related to clinical trials that were completed near the end of 2006.
As at September 30, 2007, PreMD had cash, cash equivalents and short-term investments totaling $2,342,000 ($3,276,000 as at December 31, 2006). The Company invests its funds in short-term financial instruments and marketable securities. Cash used to fund operating activities during Q3 2007 amounted to $1,116,000 compared with $1,608,000 in Q3 2006.
About PreMD Inc.
PreMD Inc. is a leader in predictive medicine, dedicated to developing rapid, non-invasive tests for the early detection of life-threatening diseases. PreMD’s cardiovascular products include a line of non-invasive skin cholesterol tests, planned to be marketed and distributed by AstraZeneca Pharmaceuticals. PreMD’s other skin cholesterol products include PREVU(x)LT, a skin cholesterol test designed for use in the life insurance industry. The company’s cancer tests include ColorectAlert(TM), LungAlert(TM) and a breast cancer test. PreMD’s head office is located in Toronto, Ontario and its research and product development facility is at McMaster University in Hamilton, Ontario. For more information about PreMD, please visit www.premdinc.com.
This press release contains forward-looking statements. These statements involve known and unknown risks and uncertainties, which could cause the Company’s actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, among others, the success of a plan for regaining compliance with certain continued listing standards of the American Stock Exchange, successful development or marketing of the Company’s products, the competitiveness of the Company’s products if successfully commercialized, the lack of operating profit and availability of funds and resources to pursue R&D projects, the successful and timely completion of clinical studies, product liability, reliance on third-party manufacturers, the ability of the Company to take advantage of business opportunities, uncertainties related to the regulatory process, and general changes in economic conditions.
In addition, while the Company routinely obtains patents for its products and technology, the protection offered by the Company’s patents and patent applications may be challenged, invalidated or circumvented by our competitors and there can be no guarantee of our ability to obtain or maintain patent protection for our products or product candidates.
Investors should consult the Company’s quarterly and annual filings with the Canadian and U.S. securities commissions for additional information on risks and uncertainties relating to the forward-looking statements. Investors are cautioned not to rely on these forward-looking statements. PreMD is providing this information as of the date of this press release and does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise.
CONTACT: Brent Norton, President and CEO, Tel: (416) 222-3449 ext. 22,
Email: bnorton@premdinc.com; Ron Hosking, Vice President Finance and CFO,
Tel: (416) 222-3449 ext. 24, Email: rhosking@premdinc.com; Michelle Rabba,
Manager, Corporate Communications, Tel: (416) 222-3449 ext. 25, Email:
mrabba@premdinc.com
