More than 46,000 tests were processed by the Company's joint-venture, Innovative Diagnostic Laboratory, LLP ("IDL") in the second quarter•Added Beckman Coulter Diagnostics' Prostate Health Index ("PHI") to IDL's menu of advanced cancer assays and initiated a commercial roll out of this groundbreaking test across the United States•
Raised more than $7 million in non-brokered private placement to support growth strategy
TORONTO, Aug. 8, 2014 (GLOBE NEWSWIRE) -- GeneNews Limited (TSX:GEN) ("GeneNews" or the "Company") today reported operational and financial results for the three-month period ended June 30, 2014. All dollar amounts are expressed in Canadian currency unless otherwise indicated and results are reported in accordance with International Financial Reporting Standards.
With a successful limited scale launch of ColonSentry® through IDL in the fourth quarter of 2013, full scale up activities began in Q1-2014, including expanding IDL's lab capacity and increasing the size and scope of the sales activity focused on ColonSentry® as well as the rollout of new tests.
"Q2-2104 total test volumes at IDL were 46,051, up more than three-fold sequentially from the 14,680 tests processed in Q1-2014," commented GeneNews' Executive Chairman, James R. Howard-Tripp. "So far, that growth has continued into the third quarter."
IDL's initial reimbursement experience for the ColonSentry® test has been positive. Private commercial payers have been receptive to IDL's submissions of ColonSentry® reimbursement claims. As a new entity, however, IDL does not yet have a history of collections of invoiced test revenue and recognizes revenue only upon receipt of payment from its customers. As a result of customary lag times between when a test is processed and payment is received, IDL's Q2-2014 test volumes are not yet fully reflected in its financial results.
IDL estimates that approximately 70–75% of the patients that have elected to have the ColonSentry® test to date are covered by private insurers. The customary initial 120-day lag time in reimbursement from these private insurers now appears to be narrowing and the pace of collection has improved. Approximately 25–30% of patients undergoing the test are covered by Medicare. Reimbursement from Medicare has not been forthcoming as ColonSentry® has not been approved for coverage.
Revenues earned by IDL for the second quarter of 2014 were approximately $1.9 million (US$1.7 million) with costs incurred of approximately $7.3 million (US$6.7 million), resulting in a quarterly IDL loss of approximately $5.4 million (US$5.1 million). As GeneNews has joint control of IDL with its American partners, the Company accounts for its interest in IDL using the equity method. As such, GeneNews reflects its share of the total revenues less total expenses in its consolidated statements of loss and comprehensive loss, which was $1.8 million (US$1.7 million) for the second quarter of 2014.
For the three months ended June 30, 2014, GeneNews' total revenues were approximately $0.40 million as compared to $0.01 million in the same period in 2013. The net loss for the second quarter of 2014 was approximately $2.7 million, or $0.06 loss per common share, as compared to a net loss of approximately $1.9 million, or $0.06 loss per common share for the same three-month period in 2013. The increase in loss in the 2014 second quarter was primarily due to the Company's share of the loss of IDL of $1.8 million, partially offset by a $0.6 million reduction in its restructured research and development costs and the increase in revenues of $0.4 million.
As of June 30, 2014, GeneNews' cash and cash equivalents amounted to approximately $0.5 million, which did not include approximately $7.2 million in gross proceeds raised by the Company in a July 2014 private placement of its common shares.
"This financing has put us in a much stronger financial position from which to execute our growth strategy," said Mr. Howard-Tripp. "We would again like to thank both new and existing shareholders for their strong show of support."
GeneNews is committed to helping IDL become a leader in molecular diagnostics and personalized medicine, serving as a strong commercialization outlet for advanced cancer tests. Taking a "multi-view" approach to the diagnosis and treatment of cancer, IDL is working to assemble, through a combination of internal pipeline development, third-party licenses and potential acquisitions, a robust menu of advanced cancer assays to be offered by it in the United States.
"Moving into the second half of 2014, menu expansion remains a key priority and we are in discussions with several entities with respect to in-licensing their products," concluded Mr. Howard-Tripp. "The addition of new tests to our ColonSentry®, EarlyCDT®-Lung and PHI offerings is a central component of the IDL model which is designed to help accelerate growth, stratify commercial risk and advance us down the pathway toward positive cash-flows and net profitability. We look forward to updating our stakeholders as we progress."
The Company's financial statements and management's discussion and analysis are available on www.sedar.com.
GeneNews is a company focused on developing and commercializing proprietary molecular diagnostic tests for the early detection of diseases and personalized health management, with a primary focus on cancer-related indications. GeneNews' first product, ColonSentry®, is the world's first blood test to assess an individual's current risk for colorectal cancer. GeneNews' common shares trade on the Toronto Stock Exchange under the symbol 'GEN'. More information on GeneNews and IDL, can be found at www.GeneNews.com and www.myinnovativelab.com.
This press release contains forward-looking statements identified by words such as "expects", "will" and similar expressions, which reflect the Company's current expectations regarding future events, including the launch of ColonSentry® test across the United States and the assembling of a robust menu of other advanced cancer tests to be offered by IDL. The forward-looking statements involve risks and uncertainties, including market reaction to the launch of the ColonSentry® test into new regions, that could cause the Company's actual events to 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, except as required by law.
CONTACT: Company Contact:
James R. Howard-Tripp
Office: (905) 209-2030
Investor & Media Contact:
Stephen KilmerKilmer Lucas Inc.
Office: (212) 618-6347
Mobile: (905) 906-6908
Source: GeneNews Limited