TORONTO, Nov. 14 /PRNewswire-FirstCall/ -- Predictive medicine
company PreMD Inc. (TSX: PMD; Amex: PME) announced today results
for the third quarter of fiscal 2007, ending September 30, 2007
("Q3 2007"). Recent Significant Highlights:
------------------------------ - Responded to FDA's request for
additional information regarding the expanded regulatory claim for
our skin cholesterol test - PREPARE actuarial analysis data
supports PREVU(x)LT as valuable cardiovascular risk assessment tool
for the life insurance industry - Breast cancer data accepted for
presentation at San Antonio Breast Cancer Symposium - PASA
manuscript accepted for publication in the American Journal of
Cardiology - Granted approval of ColoPath(TM) Neoplasia patent and
ColoPath(TM) Cancer patent in Canada - Granted approval of the
colour and PREVU(x)LT tape stripping patents in China and the
United States - Registration of PREVU(x)(TM) trademark in India
completed Expectations Going Forward: --------------------------- -
Response from FDA on our 510 (k) submission for an expanded
regulatory claim on our skin cholesterol test - Partnering our skin
cholesterol test outside of the United States - Commercialization
relationship for PREVU(x) LT within the Life Insurance industry -
Completion of development agreements in the skin care field -
Progress on patent legal action - Clinical validation of LungAlert
and ColorectAlert upon completion of clinical trials "We are very
pleased with the progress we have made during the third quarter of
fiscal 2007 through the implementation of our strategy and
development initiatives," said Dr. Brent Norton, president and CEO
of PreMD Inc. "We continue to work with AstraZeneca regarding the
planned marketing and distribution of our skin cholesterol product
in the United States and are actively negotiating alliances with
other organizations in different markets for our products. We are
currently pursuing commercialization opportunities for PREVU(x)LT
in the life insurance industry, which has garnered interest in
Canada, the United States and Europe. In addition, we have exciting
new prospects in the cosmetics field which expands the potential of
our skin cholesterol franchise. This opportunity is currently in
negotiations with a leading cosmetics company." Dr. Norton
continued "We have also made advancements with the US Food and Drug
Administration (FDA) regarding our expanded regulatory claim on our
skin cholesterol test. We are actively working with the agency to
ensure all processes are precisely met and have submitted detailed
answers to the questions asked. We anticipate hearing a response,
which could be in the form of additional questions, in the coming
weeks. On the clinical front, we are very excited by the recent
data from our PASA study, which is included with our submission to
the FDA. The data was recently presented at the AHA conference and
is scheduled for publication in April 2008 in the American Journal
of Cardiology. We also had further clinical validation with our
cancer portfolio, with our breast cancer data being accepted for
presentation at the San Antonio Breast Cancer Symposium." "Going
forward, we anticipate building near-term revenues through these
exciting new partnership opportunities and sales, royalty and
milestone payments from our skin cholesterol product. PreMD remains
deeply committed to the belief that winning the battle against
diseases such as cardiovascular and cancer can be prevented if
taken the necessary precautionary steps. Our operations and
research and development program continues to support that
commitment to predictive medicine technology, especially as we
explore other avenues to make our innovative products available."
Financial Review ---------------- The consolidated net loss for the
three months ended September 30, 2007 (Q3 2007) was $1,635,000 or
$(0.07) per share compared with a loss of $1,120,000 or $(0.05) per
share for the quarter ended Q3 2006. Total product sales were
$7,000 for Q3 2007 compared with $1,000 for Q3 2006. License
revenue was $27,000 Q3 2007, compared to $577,000 for Q3 2007.
During Q3 2007, the Company focused on managing the cancer clinical
trial program and on validation of the contract manufacturing for
the PREVU(x) system. Most of the skin cholesterol clinical trials
were completed at the end of 2006. As a result, research and
development expenditures for the quarter decreased by $104,000 to
$737,000 from $841,000 in Q3 2006. The variance for the period
reflects: - a decrease of $287,000 in spending on clinical trials
for skin cholesterol, following the submission of the U.S. FDA
application; - an increase of $176,000 in compensation expense
resulting from achievement of performance milestones; - a decrease
of $23,000 in spending on the cancer clinical trials; - an increase
of $37,000 on product development in support of manufacturing
validation for the new cordless reader and for general product
improvements; - an increase of $41,000 in legal fees for
international patent filings; and - an increase of $57,000 in
stock-based compensation, a non-cash expense, due to the vesting of
performance-based options that had been granted in a prior year.
General and administration expenses amounted to $995,000 for Q3
2007 compared with $499,000 in Q3 2006, an increase of $496,000.
The increase for the quarter includes: - an increase of $190,000 in
professional fees for legal, audit and consulting related to
business development; - an increase of $167,000 in compensation
expense resulting from increased headcount and from the achievement
of performance-based milestones; - an increase in stock-based
compensation, a non-cash expense, of $111,000 to $155,000 for Q3
2007 compared with $44,000 for Q3 2006. This resulted from the
vesting of performance-based options. Interest on convertible
debentures (issued on August 30, 2005) amounted to $167,000 in Q3
2007 compared with $172,000 in Q3 2006. The debentures bear
interest at an annual rate of 7%, payable quarterly in either cash
or stock. Imputed interest of $253,000 and $204,000 in Q3 2007 and
2006 respectively, represent the expense related to the accretion
of the liability component, at an effective interest rate of 14.8%.
Effective January 1, 2007, amortization of the deferred financing
fees is included in imputed interest whereas it was included in
amortization expenses in 2006. Amortization expenses for Q3 2007
amounted to $42,000 compared with $78,000 for Q3 2006. The gain on
foreign exchange was $533,000 for Q3 2007, compared with a loss of
$5,000 for Q3 2006. The major contributing factor for the increase
was the impact of foreign exchange rates on the convertible
debentures which are repayable in U.S. dollars. Interest income
amounted to $32,000 for Q3 2007 compared with $56,000 for Q3 2006
as a result of lower cash balances. Refundable scientific
investment tax credits ("ITCs") accrued for Q3 2007 amounted to
$54,000 versus $45,000 for Q3 2006. This increase was due to
increased salaries related to product development in 2007. Accounts
payable at September 30, 2007 amounted to $366,000 compared with
$964,000 at December 31, 2006. The large decrease resulted from the
payment of expenses related to clinical trials that were completed
near the end of 2006. As at September 30, 2007, PreMD had cash,
cash equivalents and short-term investments totaling $2,342,000
($3,276,000 as at December 31, 2006). The Company invests its funds
in short-term financial instruments and marketable securities. Cash
used to fund operating activities during Q3 2007 amounted to
$1,116,000 compared with $1,608,000 in Q3 2006. About PreMD Inc.
PreMD Inc. is a leader in predictive medicine, dedicated to
developing rapid, non-invasive tests for the early detection of
life-threatening diseases. PreMD's cardiovascular products include
a line of non-invasive skin cholesterol tests, planned to be
marketed and distributed by AstraZeneca Pharmaceuticals. PreMD's
other skin cholesterol products include PREVU(x)LT, a skin
cholesterol test designed for use in the life insurance industry.
The company's cancer tests include ColorectAlert(TM), LungAlert(TM)
and a breast cancer test. PreMD's head office is located in
Toronto, Ontario and its research and product development facility
is at McMaster University in Hamilton, Ontario. For more
information about PreMD, please visit http://www.premdinc.com/.
This press release contains forward-looking statements. These
statements involve known and unknown risks and uncertainties, which
could cause the Company's actual results to differ materially from
those in the forward-looking statements. Such risks and
uncertainties include, among others, the success of a plan for
regaining compliance with certain continued listing standards of
the American Stock Exchange, successful development or marketing of
the Company's products, the competitiveness of the Company's
products if successfully commercialized, the lack of operating
profit and availability of funds and resources to pursue R&D
projects, the successful and timely completion of clinical studies,
product liability, reliance on third-party manufacturers, the
ability of the Company to take advantage of business opportunities,
uncertainties related to the regulatory process, and general
changes in economic conditions. In addition, while the Company
routinely obtains patents for its products and technology, the
protection offered by the Company's patents and patent applications
may be challenged, invalidated or circumvented by our competitors
and there can be no guarantee of our ability to obtain or maintain
patent protection for our products or product candidates. Investors
should consult the Company's quarterly and annual filings with the
Canadian and U.S. securities commissions for additional information
on risks and uncertainties relating to the forward-looking
statements. Investors are cautioned not to rely on these
forward-looking statements. PreMD is providing this information as
of the date of this press release and does not undertake any
obligation to update any forward-looking statements contained in
this press release as a result of new information, future events or
otherwise. (x)Trademark PreMD Inc. Incorporated under the laws of
Canada CONSOLIDATED BALANCE SHEETS (In Canadian dollars) Unaudited
As at As at September 30, December 31, 2007 2006 $ $
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ASSETS Current Cash and cash equivalents 1,340,610 112,577
Short-term investments 1,001,171 3,163,482 Accounts receivable
8,299 11,221 Inventory 280,054 179,219 Prepaid expenses and other
receivables 447,627 570,773 Investment tax credits receivable
302,000 200,000
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Total current assets 3,379,761 4,237,272
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Deferred financing fees, net of accumulated amortization of
$174,863 in 2006 - 347,589 Capital assets, net of accumulated
amortization of $906,632 (2006 - $841,611) 253,500 312,410
Intangible assets, net of accumulated amortization of $972,361
(2006 - $915,027) 324,895 382,229
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3,958,156 5,279,500
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LIABILITIES AND SHAREHOLDERS' DEFICIENCY Current Accounts payable
365,781 963,990 Accrued liabilities 633,163 932,372 Current portion
of deferred revenue 106,680 -
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Total current liabilities 1,105,624 1,896,362
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Convertible debentures 5,408,490 6,350,680
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Deferred revenue 400,050 -
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Total liabilities 6,914,164 8,247,042
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Shareholders' deficiency Capital stock 28,983,711 25,263,480
Contributed surplus 2,991,633 2,521,915 Equity component of
convertible debentures 2,239,385 2,239,385 Warrants 1,557,296
1,170,020 Deficit (38,728,033) (34,162,342)
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Total shareholders' deficiency (2,956,008) (2,967,542)
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3,958,156 5,279,500
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PreMD Inc. CONSOLIDATED STATEMENTS OF LOSS, COMPREHENSIVE LOSS AND
DEFICIT (In Canadian dollars) Unaudited Three months ended Nine
Months Ended September 30 September 30 --------------------------
-------------------------- 2007 2006 2007 2006 $ $ $ $
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REVENUE Product sales 7,150 1,381 33,484 6,513 License revenue
26,670 576,995 26,670 733,670
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33,820 578,376 60,154 740,183 Cost of product sales 93,057 1,140
101,623 5,523
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Gross Profit (59,237) 577,236 (41,469) 734,660
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EXPENSES Research and development 736,855 840,505 2,108,491
3,826,029 General and administration 995,433 499,098 2,547,538
1,764,963 Interest on convertible debentures 167,217 172,243
496,200 510,380 Imputed interest on convertible debentures 253,093
204,445 732,667 608,577 Amortization 42,046 77,662 124,744 232,594
Loss (gain) on foreign exchange (533,217) 4,505 (1,287,658)
(210,538)
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1,661,427 1,798,458 4,721,982 6,732,005
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RECOVERIES AND OTHER INCOME Investment tax credits 54,000 45,000
102,000 175,000 Interest 31,531 56,047 95,760 212,976
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85,531 101,047 197,760 387,976
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Net loss and comprehensive loss for the period (1,635,133)
(1,120,175) (4,565,691) (5,609,369) Deficit, beginning of period
(37,092,900) (32,702,565) (34,162,342) (28,213,371)
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Deficit, end of period (38,728,033) (33,822,740) (38,728,033)
(33,822,740)
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Basic and diluted loss per share $(0.07) $(0.05) $(0.19) $(0.26)
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Weighted average number of common shares outstanding 25,080,610
21,685,656 24,036,431 21,601,763
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PreMD Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In Canadian
dollars) Unaudited Three months ended Nine Months Ended September
30 September 30 ------------------------ -------------------------
2007 2006 2007 2006 $ $ $ $
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OPERATING ACTIVITIES Net loss for the period (1,635,133)
(1,120,175) (4,565,691) (5,609,369) Add (deduct) items not
involving cash Amortization 42,046 77,662 124,744 232,594 Stock
compensation costs included in: Research and development expense
84,261 27,510 151,644 122,229 General and administration expense
154,803 43,881 335,408 287,093 Gain on sale of capital asset - -
143 - Imputed interest on convertible debentures 253,093 204,445
732,667 608,577 Interest on convertible debentures paid in common
shares 135,457 64,815 406,368 144,517 Loss (deduct gain) on foreign
exchange (533,217) 4,505 (1,287,658) (210,538) Net change in non-
cash working capital balances related to operations (123,726)
(834,448) (962,444) 462,085 Increase (decrease) in deferred revenue
(506,730) (76,598) (506,730) (235,190)
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Cash used in operating activities (1,115,686) (1,608,403)
(4,558,098) (4,198,002)
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INVESTING ACTIVITIES Short-term investments 15,521 1,582,645
2,124,980 3,464,549 Sale of capital assets - - 1,435 - Purchase of
capital assets (7,845) (1,743) (10,078) (22,658)
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Cash provided by investing activities 7,676 1,580,902 2,116,337
3,441,891
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FINANCING ACTIVITIES Issuance of capital stock, net of issue costs
(46,153) - 3,683,804 -
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Cash provided by (used in) financing activities (46,153) -
3,683,804 -
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Effect of exchange rate changes on cash and cash equivalents
(20,665) 5,341 (14,019) 51,553
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Net increase (decrease) in cash and cash equivalents during the
period (1,174,828) (22,160) 1,228,033 (704,558) Cash and cash
equivalents - Beginning of period 2,515,438 90,801 112,577 773,199
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- End of period 1,340,610 68,641 1,340,610 68,641
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Represented by Cash 294,138 68,641 294,138 68,641 Cash equivalents
1,046,472 - 1,046,472 -
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1,340,610 68,641 1,340,610 68,641
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DATASOURCE: PreMD Inc. CONTACT: Brent Norton, President and CEO,
Tel: (416) 222-3449 ext. 22, Email: ; Ron Hosking, Vice President
Finance and CFO, Tel: (416) 222-3449 ext. 24, Email: ; Michelle
Rabba, Manager, Corporate Communications, Tel: (416) 222-3449 ext.
25, Email:
Copyright