DiagnoCure Inc. (DiagnoCure), a in vitro diagnostics company, has reported total revenues of CAD0.40 million for the first quarter of fiscal 2009, compared with the total revenues of CAD0.49 million in the year-ago quarter. It also reported a net loss of CAD3.4 million, or CAD0.08 per share, for the first quarter of fiscal 2009, compared with the net loss of CAD2.6 million, or CAD0.06 per share, in the year-ago quarter.
These results are substantially in line with management expectations. They reflect budgeted sales and marketing initiatives to promote the Previstage GCC Colorectal Cancer Staging Test and further product optimization activities. At the end of the quarter, cash, short-term investments and long-term investments stood at $16,593,947.
In particular, the results of the first quarter reflect non-recurrent expenses in the order of $433,000, including the severance pay for the November lay-off, and a special educational grant opportunity for DiagnoCure at the January 2009 Gastrointestinal Cancers Symposium (“ASCO GI”) satellite symposium on molecular markers.
Highlights of the Quarter
During the last edition of the 2009 ASCO GI in January, DiagnoCure was selected to sponsor an independent panel of three key colorectal cancer opinion leaders, Dr. Edith P. Mitchell (Thomas Jefferson University), Dr. Stanley Hamilton (University of Texas M.D. Anderson Cancer Center) and Dr. Daniel Sargent (Mayo Clinic), who reviewed different markers for the prognosis of colorectal cancer patients. It was suggested that patients with GCC positive lymph nodes could be considered and treated as stage III patients.
On February 18, 2009, the Journal of the American Medical Association published positive results on the prognostic value of the GCC marker, to which DiagnoCure secured exclusive worldwide diagnostic rights in 2007, and which is the marker used in the company’s Previstage GCC Colorectal Cancer Staging Test. This major prospective 5-year multicenter study of 425 enrolled patients demonstrated that guanylyl cyclase C (“GCC” or “GUCY2C”) is the strongest independent predictor of colorectal cancer recurrence in patients considered low risk by current assessment methods. In a group of 257 stage I and II colorectal cancer patients, when GCC was considered independently from other factors, patients whose nodes were GCC positive were 4.7 times more likely to develop disease recurrence than those whose nodes were GCC negative. In fact, patients with GCC positive nodes had a risk of recurrence comparable to that of stage III colorectal cancer patients.
Gen-Probe, DiagnoCure’s PCA3 development and commercialization partner, confirmed during its fourth quarter and annual results conference call that the European sales of the Progensa PCA3 test continued to increase, driven by articles published in peer-reviewed literature and strong marketing efforts. In addition, the potential acquisition of Tepnel would allow Gen-Probe to enhance its ongoing sales efforts of the PCA3 test in Europe by leveraging Tepnel’s European market knowledge, established infrastructures and manufacturing facilities.
Results for the first quarter ended January 31, 2009
Royalty from Gen-Probe tripled, from $40,787 to $132,311 for the first quarter of 2009. This increase is attributable to the sales of Progensa(TM) PCA3 in Europe by Gen-Probe.
Interest income decreased by $163,606, to $171,824 for the first quarter of 2009 compared with $335,430 for the first quarter of 2008. The decrease is attributable to DiagnoCure’s use of fund to finance the operating activities and the reduction of interest levels in its investments.
Cost of sales decreased by $56,958, from $69,790 for the first quarter of 2008 to $12,832 for 2009.
These results are substantially in line with Management expectations and reflect activities undertaken during this quarter, in line with the companyy’s plans and on-going commitment to develop high-value diagnostic tests for the detection and management of cancer. At the end of the quarter, cash, short-term and long-term investments stood at $16,593,947, down from $20,130,705 as of October 31, 2008. This decrease of $3,536,758 is due to the use of liquidity to finance the operating activities of this quarter. Management is satisfied that it has adequate cash resources to finance the companyy’s activities, and will monitor its cash levels.