DiagnoCure announces second quarter 2010 results
QUEBEC CITY, June 9 /PRNewswire-FirstCall/ - DiagnoCure, Inc. (TSX: CUR), a life sciences company commercializing high-value cancer diagnostic tests and delivering laboratory services, today reported financial and operation results for the second quarter 2010 ended April 30, 2010. The Company announced a net loss of $2,204,832 or $0.05 per share per share for the second quarter 2010. These results reflect activities undertaken during this quarter and on-going commitment to develop high-value diagnostic tests for the detection and management of cancer. These results also reflect the enterprise structure optimization announced on February 15, 2010, in line with Management's objective to ensure that it has sufficient cash resources to fund its research and development activities and to maintain its ongoing operations. At the end of the quarter, cash, short-term investments and long-term investments stood at $9,682,540.
Highlights of the Second Quarter 2010
In early March 2010, PCA3's clinical utility was confirmed in two large worldwide studies, conducted in a subset of about 2,400 patients from GlaxoSmithKline's REDUCE trial of dutasteride. The studies were presented at the American Society of Clinical Oncology's Genitourinary Cancers Symposium (ASCO GU) in San Francisco. The results demonstrated that PCA3 can help determine whether men suspected of having prostate cancer should undergo a repeat biopsy and can predict the risk of having an aggressive cancer.
In April 2010, PCA3 was the topic of over 13 presentations at the 2010 European Association of Urology (EAU) meeting, the world largest urology event, held in Barcelona, Spain, with 14,000 registrants. PCA3 was discussed by prominent researchers who presented reviews and data on the clinical utility of the test in the management of prostate cancer. In particular, Pr. Alexandre de la Taille from the urology service of Henri Mondor hospital, Creteil, France, presented the results of a new European study of 516 men. The study suggested that PCA3 could be useful for predicting the outcome of an initial prostate biopsy, thereby reducing prostate biopsies by 40%, while missing only 5% of the high grade cancers on the initial biopsy.
More recently, at the meeting of the American Urology Association, PCA3 was also featured in 12 presentations. In particular, a multi-practice American study on about 1,900 men concluded that PCA3 can predict the outcome of the first biopsy better than the traditional PSA test. In the study, men with a PCA3 score over 35 had an 80% risk of having prostate cancer.
With regard to its American service laboratory operations, DiagnoCure appointed in April Ms. Valerie Palmieri President of DiagnoCure Oncology Laboratories. Ms. Palmieri brings to DiagnoCure more than 25 years of experience in the laboratory industry, including executive positions at DIANON Systems and Laboratory Corporation of America, responsible for laboratory services, business strategic planning, cost management, quality, customer retention and operations management. Since her appointment, Mrs Palmieri has initiated a review of the Company's laboratory business model, and put together a new advisory group of key opinion leaders in the field of colorectal cancer. Under her leadership, it is expected that DiagnoCure Oncology Laboratories will grow into a profitable colorectal cancer management laboratory, centered around the Company's Previstage(TM) GCC Colorectal Cancer Staging Test.
Results for the Second Quarter 2010
Total revenues for the second quarter of 2010 were $344,093 compared with $467,152 for the second quarter of 2009. In the second quarter of 2010, royalty revenues amounted to $154,967 compared with $164,285 for the corresponding period of 2009. Royalties revenues from Gen-Probe increased by $9,860, from $145,107 to $154,967 for the second quarter of 2010. Without taking into account the effect of the exchange rate variation, royalty revenues from Gen-Probe have increased by 25%, from US$122,226 for the second quarter of 2009 to US$153,190 for the second quarter of 2010. This increase is mostly attributable to the sales of PROGENSA(R) PCA3 in Europe by Gen-Probe. Also in the second quarter of 2009, DiagnoCure recorded royalties of $19,178 from Scimedx, related to ImmunoCyt(TM) / uCyt+(TM). In the second quarter of 2009, DiagnoCure sold clinical samples to Gen-Probe, in support of their prostate cancer testing R&D, for an amount of $28,405. There were no sample sales in the second quarter of 2010. As part of the amended agreement signed with Gen-Probe on April 29, 2009, DiagnoCure recorded a portion of the annual payment, that is $131,088, for the second quarter of 2010 compared with $148,400 for the second quarter of 2009. This decrease of $17,312 is only attributable to a difference in the exchange rate. Also during the quarter ended April 30, 2010, DiagnoCure received reimbursement for its Previstage(TM) GCC Colorectal Cancer Staging Test for an amount of $16,846.
Interest income decreased by $82,711, to $41,192 for the second quarter of 2010 compared with $123,903 for the second quarter of 2009. The decrease is attributable to DiagnoCure's use of fund to finance its operating activities and the lower interest rates on its investments.
Cost of sales decreased by $4,346, from $16,422 for the second quarter of 2009 to $12,076 for the same quarter of 2010. This decrease is related to the end of samples sales to Gen-Probe. The cost of sales for this quarter represents the cost related to the Previstage(TM) GCC Colorectal Cancer Staging Test reimbursed.
Operating expenses decreased by $564,627, from $3,101,476 for the second quarter of 2009 to $2,536,849 for the second quarter of 2010. This decrease reflects the impact of the enterprise structure optimization announced in February.
Based on the above, for the second quarter of 2010, DiagnoCure recorded a net loss of $2,204,832 or $0.05 per share, compared with $2,622,237 or $0.06 per share, for the same period of 2009.
Financial Data
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For the second quarter
ended April 30
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2010 2009
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$ $
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Sales 16,846 30,564
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Revenue under research and license agreement 286,055 312,685
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Interest 41,192 123,903
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Total revenues 344,093 467,152
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Cost of sales 12,076 16,422
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Gross margin 332,017 450,730
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Operating expenses (before stock-based
compensation) 2,420,316 2,941,385
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Net loss (before stock-based compensation) (2,088,299) (2,490,655)
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Stock-based compensation 116,533 160,091
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Net loss before income taxes (2,204,832) (2,650,746)
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Future income taxes - 28,509
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Net loss (2,204,832) (2,622,237)
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Basic and diluted loss per share (0.05) (0.06)
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Weighted average number of common shares
outstanding 42,965,148 42,799,475
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Consolidated Balance Sheets
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As at April 30
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2010 2009
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Cash, cash equivalents, temporary and
long-term investments 9,682,540 14,083,829
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Total assets 20,295,730 27,781,898
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Shareholders' equity 17,426,433 23,224,245
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About DiagnoCure
DiagnoCure (TSX: CUR) is a life sciences company commercializing high-value cancer diagnostic tests and delivering laboratory services that increase clinician and patient confidence in making critical treatment decisions. DiagnoCure Oncology Laboratories, a subsidiary of DiagnoCure, Inc., launched in 2008 the Previstage(TM) GCC Colorectal Cancer Staging Test, the first GCC-based molecular test for the management of colorectal cancer. A major study published in the February 18, 2009, edition of the Journal of the American Medical Association demonstrated that GCC, to which DiagnoCure owns exclusive worldwide diagnostic rights, is the strongest independent predictor of colorectal cancer recurrence. More clinical studies are underway to confirm the clinical utility of the Previstage(TM) GCC test. The Company has a strategic alliance with Gen-Probe (NASDAQ: GPRO) for the development and commercialization of a second-generation prostate cancer test using PCA3, DiagnoCure's proprietary molecular marker. This test is available through laboratories in the U.S. and in Canada using PCA3 analyte specific reagents (ASR) from Gen-Probe, in Europe as the CE-marked PROGENSA(R) PCA3 in vitro assay. Gen-Probe recently completed a 500-patient clinical study aimed at securing FDA approval for the commercialization of the PROGENSA(R) PCA3 test in the U.S. and is on target to file a PMA by the end of the year. For more information, visit www.diagnocure.com.
Forward-looking statements
This release contains forward-looking statements that involve known and unknown risks, uncertainties and assumptions that may cause actual results to differ materially from those expected. By their very nature, forward-looking statements are based on expectations and hypotheses 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, clinical studies 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 the heading "Risk Factors". DiagnoCure undertakes no obligation to publicly update or revise any forward-looking statements contained herein unless required by the applicable securities laws and regulations.
SOURCE DIAGNOCURE INC.
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