TORONTO, March 26 /PRNewswire-FirstCall/ -- 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 fourth quarter and year ended December 31, 2007.
"This was a transformative year for GeneNews because of the advancements made for the laboratory-developed test (LDT) version of ColonSentry(TM) and the strengthening of our internal processes and systems," said Dr. K. Wayne Marshall, MD, PhD, President and CEO of GeneNews. "We are now positioned for the initial commercial launch of ColonSentry in the third quarter of 2008 through our in-house clinical reference lab located in the Toronto-area."
Product Highlights - Completed collection of 10,000 patient samples for internal validation studies of ColonSentry. - Initiated the collection of patient samples for additional clinical trials for the development of an In Vitro Diagnostic (IVD) version of ColonSentry in December. - Subsequent to year-end in January 2008, published a paper entitled "Novel Blood-Based, Five-Gene Biomarker Set for the Detection of Colorectal Cancer" in the Clinical Cancer Research journal. - Subsequent to year-end on March 14, 2008, received notification that an abstract entitled "Stratification of colorectal cancer probability using six genes from whole blood" was selected for presentation on April 15, 2008 at the annual meeting of the American Association of Cancer Research to be held in San Diego, California. Corporate Highlights - Implemented a Quality Management System to conform to ISO 13485:2003 requirements and, subsequent to year end, received formal certification on March 6, 2008 for the design and development of in-vitro diagnostic test kits for use in the management of colorectal disease in a laboratory setting. - Received grant from the National Research Council's Industrial Research Assistance Program (IRAP) in December. - Renovated and relocated to expanded state-of-the-art facilities to house the Company's corporate headquarters, offices, research and development facilities and clinical reference laboratory in September. - Secured $2 million for development of prostate disease biomarkers from an Asian biomedical consortium in August. - Established laboratory facilities and infrastructure for patient sample collection across multiple diseases in Penang, Malaysia. - Established a Clinical Advisory Board of colorectal cancer screening leaders in July. Financial results (CDN dollars) for the fourth quarter:
Total revenue for the quarter ended December 31, 2007 was $0.3 million compared to $0.7 million for the same period last year. Revenue in 2007 resulted from an agreement entered into by the Company with an Asian biomedical consortium to identify and validate a set of biomarkers in the field of prostate diseases, for a total fee of $2 million (USD), while revenues in 2006, resulted from a collaboration agreement with Pfizer completed in the first fiscal quarter of 2007.
Interest earned during the three months ended December 31, 2007 was $123,780, compared with $51,225 for the corresponding quarter in the prior year.
Total operating expenditures for the quarter ended December 31, 2007 were $3.1 million compared with $3.4 million for the same period last year. Research and development expenses for the quarter were $2.1 million compared with $2.7 million for the same period last year. General and administrative expenses for the fourth quarter were $0.7 million compared with $0.4 million for the corresponding quarter in the previous year.
The net loss for the quarter ended December 31, 2007 was $2.6 million or ($0.05) per common share compared with a net loss of $2.7 million or ($0.05) per common share for the same period last year. The net loss is reflective of the Company's continuing focus on research and development and the process leading to commercialization of its first product ColonSentry(TM), a convenient and patient-friendly blood-based test that can assess a patient's current risk for colon cancer, and the advancement of related products in the Company's pipeline.
Financial results (CDN dollars) for the year-ended December 31, 2007:
Total revenue for the year-ended December 31, 2007 was $2.2 million compared with $3.3 million for the same period last year. Of the revenues in 2007, $0.2 resulted from the prostate disease biomarker development agreement and $1.7 representing the final revenue from a collaboration agreement with Pfizer. In 2006, revenues resulted entirely from the Pfizer agreement.
Interest earned during the year-end ended December 31, 2007 was $822,000, compared to $448,000 for the corresponding period during the prior year.
Total operating expenditures for the year-ended December 31, 2007 were $12.6 million compared with $12.7 million for the same period last year. Research and development expenses for the quarter were $8.9 million compared with $9.5 million for the same period last year. General and administrative expenses for the year-ended December 31, 2007 were $2.7 million compared with $1.9 million for the corresponding period in 2006.
The net loss for the year-ended December 31, 2007 was $9.6 million or ($0.17) per common share compared to a net loss of $8.9 million or ($0.18) per common share for the same period last year. The Company's continuing focus is on research and development leading to commercialization of its first product and the development of related products in the Company's pipeline.
As at December 31, 2007, the Company's cash and cash equivalents amounted to $11,279,030.
As at December 31, 2007 the Company had 55,518,769 common shares, and 625,000 broker warrants were outstanding.
About GeneNews --------------
GeneNews is focused on the application of functional genomics to enable early diagnosis and personalized therapeutic intervention based on disease-specific biomarkers. The Company has developed a novel approach, the Sentinel Principle(TM), to detect and stage virtually any disease or medical condition from a simple blood sample. GeneNews is currently applying the Sentinel Principle(TM) in major areas with unmet clinical needs such as cancer, arthritis, cardiovascular disease and neurological disorders. GeneNews' first product in development, ColonSentry(TM), is a convenient and patient-friendly blood-based test that can detect colon cancer. For more information on GeneNews, visit http://www.genenews.com/.
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 (Expressed in Canadian dollars) As at December 31 2007 2006 $ $ ------------------------------------------------------------------------- ASSETS Current Cash and cash equivalents 11,279,030 20,593,568 Short-term investment 400,000 - Accounts receivable 1,582,242 135,315 Investment tax credits recoverable 1,038,199 796,900 Prepaid expenses and deposits 512,914 685,819 ------------------------------------------------------------------------- Total current assets 14,812,385 22,211,602 ------------------------------------------------------------------------- Property, plant and equipment, net 3,635,245 1,645,488 Intellectual property, net 400,380 842,528 ------------------------------------------------------------------------- 18,848,010 24,699,618 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Accounts payable and accrued liabilities 1,699,153 1,821,355 Deferred revenue 1,204,305 - Current portion of long-term debt 585,903 102,549 ------------------------------------------------------------------------- Total current liabilities 3,489,361 1,923,904 ------------------------------------------------------------------------- Long-term debt 1,280,916 - Long-term portion of deferred revenue 401,371 - ------------------------------------------------------------------------- Total liabilities 5,171,648 1,923,904 ------------------------------------------------------------------------- Commitments and contingencies Shareholders' equity Capital stock 44,290,930 44,234,409 Contributed surplus 2,733,562 2,255,390 Deficit (33,348,130) (23,714,085) ------------------------------------------------------------------------- Total shareholders' equity 13,676,362 22,775,714 ------------------------------------------------------------------------- 18,848,010 24,699,618 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Note: The full financial statements with notes and auditors' report are found on SEDAR GeneNews Limited CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT (Expressed in Canadian dollars) Years ended December 31 2007 2006 $ $ ------------------------------------------------------------------------- REVENUE Milestone revenue 1,666,236 567,850 Upfront payment revenue 501,476 2,112,323 Fees for services - 603,095 ------------------------------------------------------------------------- 2,167,712 3,283,268 ------------------------------------------------------------------------- EXPENSES Research and development 8,902,433 9,518,383 General and administrative 2,655,651 1,889,675 Stock-based compensation 478,172 728,383 Amortization of intellectual property 442,148 442,147 Foreign exchange loss 114,149 68,797 Interest on long-term debt 31,490 19,758 ------------------------------------------------------------------------- 12,624,043 12,667,143 ------------------------------------------------------------------------- Interest income 822,286 448,202 ------------------------------------------------------------------------- Net and comprehensive loss for the year (9,634,045) (8,935,673) Deficit, beginning of year (23,714,085) (14,778,412) ------------------------------------------------------------------------- Deficit, end of year (33,348,130) (23,714,085) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net and comprehensive loss per common share Basic and fully diluted $(0.17) $(0.18) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Weighted average number of common shares outstanding Basic and fully diluted 55,453,018 49,045,966 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Note: The full financial statements with notes and auditors' report are found on SEDAR GeneNews Limited CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in Canadian dollars) Years ended December 31 2007 2006 $ $ ------------------------------------------------------------------------- OPERATING ACTIVITIES Net and comprehensive loss for the year (9,634,045) (8,935,673) Add items not involving cash Stock-based compensation 478,172 728,383 Loss on disposal of property, plant and equipment 15,587 - Amortization of property, plant and equipment 504,762 389,639 Amortization of intellectual property 442,148 442,147 ------------------------------------------------------------------------- (8,193,376) (7,375,504) Changes in non-cash working capital balances related to operations Accounts receivable (1,446,927) 1,221,077 Investment tax credits recoverable (241,299) 458,022 Prepaid expenses and deposits 172,905 (320,104) Accounts payable and accrued liabilities (122,202) 891,518 Deferred revenue 1,605,676 (2,134,361) ------------------------------------------------------------------------- Cash used in operating activities (8,225,223) (7,259,352) ------------------------------------------------------------------------- FINANCING ACTIVITIES Net proceeds from share issue 56,521 23,896,716 Net proceeds from disposal of property, plant and equipment 364 - Proceeds from exercise of employee stock options - 165,410 Net proceeds from exercise of 2004 broker warrants - 33,452 Proceeds of long-term debt 1,899,990 - Repayment of long-term debt (268,316) (139,427) ------------------------------------------------------------------------- Cash provided by financing activities 1,688,559 23,956,151 ------------------------------------------------------------------------- INVESTING ACTIVITIES Short-term investment (400,000) - Additions to property, plant and equipment (2,377,874) (784,113) ------------------------------------------------------------------------- Cash used in investing activities (2,777,874) (784,113) ------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents during the year (9,314,538) 15,912,686 Cash and cash equivalents, beginning of year 20,593,568 4,680,882 ------------------------------------------------------------------------- Cash and cash equivalents, end of year 11,279,030 20,593,568 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Cash and cash equivalents are comprised of the following Cash 6,152,694 294,578 Investment in money market fund 5,126,336 20,298,990 ------------------------------------------------------------------------- 11,279,030 20,593,568 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Supplemental cash flow information Additions to property, plant and equipment not involving cash 132,596 - Interest received 763,353 360,368 Interest paid 35,490 19,758 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Note: The full financial statements with notes and auditors' report are found on SEDAR
