Spectral Announces First Quarter Results

TORONTO, May 15, 2020 (GLOBE NEWSWIRE) -- Spectral Medical Inc., (TSX: EDT), a late stage theranostic company advancing therapeutic options for sepsis and septic shock, today announced its financial results for the first quarter ended March 31, 2020.

Financial Review

Revenue for the three-months ended March 31, 2020 was $631,000 compared to $547,000 for the same three-month period last year, representing an increase of $84,000 or 15%.

Operating costs for the quarter ended March 31, 2020, were $4,056,000 compared to $1,540,000 for the corresponding period in 2019. The increase is a result of the ramping up of the Company’s Phase III clinical trial, whereby costs vary depending on the timing and level of patient enrolment. In addition, there was an increase in share compensation expense, as share options were granted in the first quarter of 2020. Share options were granted in the second quarter of 2019. Additionally, the Company incurred one-time costs associated with a legacy financial advisory services agreement relating to the commercial transaction agreement completed with Baxter International Inc. (“Baxter”) and the withdrawn prospectus offering in early March 2020. 

The Company continues to maintain a low cost operating structure for its base business operations. On an adjusted basis, normalized operating expenses (including clinical trial activities) were approximately $2,321,000 for the first quarter of 2020 compared to approximately $1,427,000 for the corresponding period in 2019. Adjustments reflect either non-recurring or non-cash expenses, including: i) legacy financial advisory services fee; ii) withdrawn prospectus offering costs; iii) non-cash compensation; and iv) depreciation. These amounts were partly offset by foreign exchange gains.

Loss for the quarter ended March 31, 2020 was $3,425,000 ($0.015 per share) compared to a loss of $993,000 ($0.004 per share) for the same quarter last year.

The Company concluded the first quarter of 2020 with cash of $7,771,000 compared to $1,435,000 cash on hand as of December 31, 2019. This cash balance reflects the non-refundable US$5,000,000 upfront rights payment from Baxter International Inc., which was received on February 21, 2020. Based on current operating plans, Spectral expects to have cash to fund its 2020 business plan.

The total number of common shares outstanding for the Company was 228,105,745 as at March 31, 2020.

About Spectral

Spectral is a Phase III company seeking U.S. FDA approval for its unique product for the treatment of patients with septic shock, Toraymyxin™ (“PMX”). PMX is a therapeutic hemoperfusion device that removes endotoxin, which can cause sepsis, from the bloodstream and is guided by the Company’s Endotoxin Activity Assay (EAA™), the only FDA cleared diagnostic for the risk of developing sepsis.

PMX has been approved for therapeutic use in Japan and Europe, and has been used safely and effectively on more than 200,000 patients to date. In March 2009, Spectral obtained the exclusive development and commercial rights in the U.S. for PMX, and in November 2010, signed an exclusive distribution agreement for this product in Canada. Approximately 330,000 patients are diagnosed with severe sepsis and septic shock in North America each year.

Spectral, through its wholly owned subsidiary, Dialco Medical Inc. (“Dialco”), is also commercializing a new proprietary platform, “SAMI”, targeting the renal replacement therapy (“RRT”) market. Dialco is also seeking regulatory approval for “DIMI” which is based on the same RRT platform, but will be intended for home hemodialysis use.

Spectral is listed on the Toronto Stock Exchange under the symbol EDT. For more information please visit www.spectraldx.com.

Forward-looking statement

Information in this news release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Implicit in this information, particularly in respect of the future outlook of Spectral and anticipated events or results, are assumptions based on beliefs of Spectral's senior management as well as information currently available to it. While these assumptions were considered reasonable by Spectral at the time of preparation, they may prove to be incorrect. Readers are cautioned that actual results are subject to a number of risks and uncertainties, including the availability of funds and resources to pursue R&D projects, the successful and timely completion of clinical studies, the ability of Spectral to take advantage of business opportunities in the biomedical industry, the granting of necessary approvals by regulatory authorities as well as general economic, market and business conditions, and could differ materially from what is currently expected.

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this statement.

For further information, please contact:

Spectral Medical Inc.
Condensed Interim Consolidated Statements of Financial Position
(Unaudited)
(in thousands of Canadian dollars)

Spectral Medical Inc.
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss 
(Unaudited)
(in thousands of Canadian dollars, except for share and per share data)

Spectral Medical Inc.
Condensed Interim Consolidated Statements of Changes in Equity
(Unaudited)
(in thousands of Canadian dollars)

Spectral Medical Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands of Canadian dollars)

NON-IFRS MEASURES

In addition to reporting financial information in accordance with International Financial Reporting Standards (“IFRS”) in this press release, Spectral is also reporting normalized operating expenses, which are non-IFRS financial measures. Normalized operating expenses are not defined by IFRS and should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. In addition, Spectral’s definitions of normalized operating expenses may not be comparable to similarly titled non-IFRS measures presented by other companies. Investors and others are encouraged to review Spectral’s financial information in its entirety and not rely on a single financial measure. As defined by Spectral, normalized operating expenses represent total expenses adjusted for non-recurring items for consulting and professional fees (legacy financial advisory fees and withdrawn prospectus offering costs), non-cash share-based compensation expenses in salaries and benefits, depreciation expense, and foreign exchange gain or loss.

Normalized operating expenses are a non-IFRS measure that Spectral believes is useful because it excludes those items that Spectral believes are not representative of Spectral’s operating expenses.

Spectral Medical Inc.
Reconciliation
(Unaudited)
(in thousands of Canadian dollars)