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DiagnoCure announces fourth quarter 2013 and year-end results

January 16, 2014

Providing Corporate Update on Key Projects

QUEBEC CITY, Jan. 16, 2014 /PRNewswire/ – DiagnoCure, Inc. (TSX: CUR)
(OTCQX: DGCRF) (the “Corporation”) today reported financial and
operational results for the fourth quarter 2013 and fiscal year ended
October 31, 2013. The Corporation announced a net loss of $1,334,099 or
$0.03 per share for the fourth quarter ended October 31, 2013, compared
to $1,978,355 or $0.05 per share for the same period in 2012 and a net
loss of $3,566,942 or $0.08 per share for fiscal year 2013 compared to
$3,679,324 or $0.09 per share for the same period in 2012. At the end
of the quarter, cash, short-term investments and long-term investments
stood at $4,190,296 compared to $5,824,771 at the end of fiscal year
2012.

During fiscal year 2013, PCA3 royalties paid to DiagnoCure by Hologic in
2013 increased by 14% compared with 2012, representing worldwide sales
of less than $US8.5 million. DiagnoCure believes that this modest
increase in sales is not representative of the true commercial
potential of this product, considering the consensus clinical utility
that has emerged from several published studies (see “Update on PCA3” below).

Consequently, in 2013, DiagnoCure maintained diligent communications
with Hologic in an effort to increase sales of PCA3. Under the
leadership of Richard Bordeleau, Senior Advisor to the Board, and as
part of its effort to transform the Corporation and ensure the
commercial development of PCA3, in the last months of 2013, DiagnoCure
approached Hologic with the intent to purchase its entire prostate
oncology business, allowing the Corporation to regain the rights
granted to Hologic on PCA3 and to expand its portfolio with T2:ERG, a
promising biomarker identified by Dr. Arul Chinnaiyan from the
University of Michigan who is currently offering the combination of
PCA3 and T2:ERG in his CLIA-certified laboratory.

In 2013, DiagnoCure also obtained a grant from the National Research
Council of Canada supporting research developing a new multi-marker
prostate cancer test with an objective of broadening the Corporation’s
portfolio in this market segment. New patent applications were also
filed, further strengthening DiagnoCure’s intellectual property
portfolio in this field. The first application is due to be published
before the end of this month.

Regarding the Previstage(TM) GCC colon cancer test, in the last quarter of 2013, DiagnoCure
intensified discussions aimed at obtaining multiple partners to market
GCC in both North America and Europe. DiagnoCure believes that the test
will be made more widely available with a combination of public,
academic and private partners.

Additionally, during fiscal year 2013, DiagnoCure continued to
strengthen its overall intellectual property portfolio. Six more
patents were obtained supporting the PCA3 biomarker. The Corporation
was also granted a patent from the European Patent Office (EPO),
providing exclusive rights through February 2030 regarding use of the
GCC marker to gain prognostic information based on the tumor burden
measured at the molecular level in lymph nodes.

Dr. Yves Fradet, Chairman of the Board, stated, “DiagnoCure’s board of
directors is satisfied with the thorough analysis of all opportunities
and the actions undertaken in the recent months. We strongly believe in
the potential of PCA3 and have applied all required resources to
provoke significant change.”

“During the last quarter, DiagnoCure has evaluated several scenarios
aimed at increasing shareholder value, including transformational
acquisitions. The Corporation also has and will continue to pursue all
opportunities relating to enhancing PCA3 market penetration.
Shareholders can be assured that every effort is being made to preserve
cash while maintaining the Corporation’s ability to seize and implement
opportunities with our qualified team.” added Dr. Vincent Zurawski,
Lead Director of the Corporation.

Results for the Fiscal Year Ended October 31, 2013

Total revenues for fiscal year 2013 were $671,228 compared with
$2,472,038 for 2012. This decrease of $1,800,810 is attributable to the
termination, on January 11, 2013 of the development and license
agreements signed in June 2011 with Signal Genetics. That development
agreement provided $1,223,485 of revenues in fiscal year 2012. The
remaining decrease is attributable to the payment of $626,401 made by
Gen-Probe in relation to the FDA milestone reached for PROGENSA® PCA3
in fiscal year 2012. In 2013, royalty revenues from Hologic Gen-Probe
increased by $83,613, or 14%, to $671,228, from $587,615 for 2012. This
increase is attributable to an increase in sales of 45% in the U.S.
market amid challenges in the reimbursement environment for molecular
diagnostic tests, offset by a decrease of 30% in the European market.

Operating expenses decreased by $1,913,192, to $4,238,170 for fiscal
year 2013 from $6,151,362 for fiscal year 2012. This decrease is mainly
attributable to the development agreement performed in fiscal year 2012
in support to the Previstage(TM) GCC Colorectal Cancer Staging Test and to an allowance for doubtful
accounts of $507,092 related to the Signal Genetics development
agreement. Based on the above, for fiscal year 2013, DiagnoCure
recorded a net loss of $3,566,942 or $0.08 per share, compared with
$3,679,324 or $0.09 per share for fiscal year 2012.

Results of the Fourth Quarter 2013

Total revenues for the fourth quarter of 2013 were $149,465 compared to
$142,995 for the same period of 2012. This increase of $6,470 is
attributable to royalty revenues from Hologic Gen-Probe. In the fourth
quarter of 2013, royalty revenues from Hologic Gen-Probe increased by
$6,470 attributable to an increase of 12% in the U.S. market amidst
challenges in the reimbursement environment for molecular diagnostic
tests, offset by a decrease of 9% in the European market.

Operating expenses decreased by $637,786, to $1,483,564 for the fourth
quarter of 2013, from $2,121,350 for the same quarter of 2012. This
decrease is attributable to the termination of the R&D services
performed in support to the Previstage(TM) GCC Colorectal Cancer Staging Test and to an impairment charge of
$440,693 for the fourth quarter of 2013 compared to $650,000 in the
fourth quarter of 2012 attributable to a re-evaluation of the Shc
intangible asset. Based on the above, for the fourth quarter of 2013,
DiagnoCure recorded a net loss of $1,334,099 or $0.03 per share,
compared with $1,978,355 or $0.05 per share, for the same period of
2012.

Financial Data

     _____________________________________________________________________
    |                     |   Three months ended  |         Years ended   |
    |For the periods of   |       October 31      |         October 31    |
    |                     |_______________________|_______________________|
    |                     |     2013  |     2012  |     2013  |     2012  |
    |_____________________|___________|___________|___________|___________|
    |                     |          $|          $|          $|          $|
    |_____________________|___________|___________|___________|___________|
    |Revenue under        |           |           |           |           |
    |research agreement   |     |     |     |  1,223,485|
    |_____________________|___________|___________|___________|___________|
    |Revenue under license|           |           |           |           |
    |and royalty agreement|    149,465|    142,995|    671,228|  1,248,553|
    |_____________________|___________|___________|___________|___________|
    |Total revenues       |    149,465|    142,995|    671,228|  2,472,038|
    |_____________________|___________|___________|___________|___________|
    |Operating expenses   |           |           |           |           |
    |(before stock-based  |           |           |           |           |
    |compensation,        |           |           |           |           |
    |depreciation,        |           |           |           |           |
    |amortization and     |           |           |           |           |
    |impairment)          |    787,036|  1,191,988|  2,800,532|  4,356,094|
    |_____________________|___________|___________|___________|___________|
    |Net loss (before     |           |           |           |           |
    |stock-based          |           |           |           |           |
    |compensation,        |           |           |           |           |
    |depreciation,        |           |           |           |           |
    |amortization and     |           |           |           |           |
    |impairment)          |  (637,571)|(1,048,993)|(2,129,304)|(1,884,056)|
    |_____________________|___________|___________|___________|___________|
    |Stock-based          |           |           |           |           |
    |compensation         |     40,411|     43,356|    128,116|    179,713|
    |_____________________|___________|___________|___________|___________|
    |Depreciation of      |           |           |           |           |
    |property, plant and  |           |           |           |           |
    |equipment            |     15,403|     24,019|     69,908|    118,578|
    |_____________________|___________|___________|___________|___________|
    |Amortization of      |           |           |           |           |
    |intangible asset     |    200,021|    211,987|    798,921|    846,977|
    |_____________________|___________|___________|___________|___________|
    |Impairment of        |           |           |           |           |
    |intangible asset     |    440,693|    650,000|    440,693|    650,000|
    |_____________________|___________|___________|___________|___________|
    |Net loss             |(1,334,099)|(1,978,355)|(3,566,942)|(3,679,324)|
    |_____________________|___________|___________|___________|___________|
    |Basic and diluted net|           |           |           |           |
    |loss per share       |     (0.03)|     (0.05)|     (0.08)|     (0.09)|
    |_____________________|___________|___________|___________|___________|
    |Weighted average     |           |           |           |           |
    |number of common     |           |           |           |           |
    |shares outstanding   | 43,040,471| 43,029,037| 43,040,471| 43,029,037|
    |_____________________|___________|___________|___________|___________|


Consolidated Balance Sheets

     _______________________________________________________________
    |                                         |   As of October 31  |
    |_________________________________________|_____________________|
    |                                         |    2013  |    2012  |
    |_________________________________________|__________|__________|
    |Cash, temporary and long-term investments| 4,190,296| 5,824,771|
    |_________________________________________|__________|__________|
    |Total assets                             | 7,849,267|11,256,369|
    |_________________________________________|__________|__________|
    |Shareholders' equity                     | 7,009,261|10,448,087|
    |_________________________________________|__________|__________|
    |Number of common Shares outstanding      |43,040,471|43,040,471|
    |_________________________________________|__________|__________|


Conference call

DiagnoCure’s management will host a conference call at 4:30 p.m. (ET) on
January 16, 2014. Interested participants may listen to the call by
dialing 1-888-390-0546 or 514-225-6995 and referencing code 50137031
approximately 15 minutes prior to the call. The Corporation will also
provide a live webcast of the call. Interested participants may access
the webcast on DiagnoCure’s website at www.diagnocure.com, through a link on the Investors page – Presentations. A replay of the
webcast will be available on DiagnoCure’s website for those unable to
participate in the live webcast.

Next annual meeting

At the next shareholders meeting to be held on April 17, 2014, the
shareholders of the Corporation will be asked to reconfirm the
Corporation’s existing shareholder rights plan (the “Shareholder Rights
Plan”). The Shareholder Rights Plan was originally ratified by the
shareholders of the Corporation at the annual and special meeting of
shareholders held on March 11, 2011. The purpose of the Shareholder
Rights Plan is to provide adequate time for shareholders to properly
assess the merits of a take over bid for the Corporation without undue
pressure and to provide the Board of Directors with the opportunity to
explore and develop alternatives to a take over bid that are in the
best interests of the Corporation. The Shareholder Rights Plan is set
to expire upon the conclusion of the annual meeting of shareholders of
the Corporation in 2020, subject to reconfirmation by shareholders in
2014 and 2017. The full text of the Shareholder Rights Plan is
available on SEDAR at www.sedar.com.

Update on PCA3

As the field of prostate cancer is moving toward more integrated risk
assessment to decide whether a prostate biopsy is necessary, DiagnoCure
is pleased to report that many studies continue to examine the role of
the urinary PCA3 score in conjunction with other urinary markers to
enhance the specificity of screening and reduce unnecessary biopsies.
In 2013 alone, DiagnoCure has monitored more than 54 new clinical
publications describing PCA3, which brings the total of papers on PCA3
to nearly 250. Among those published in 2013, at least two confirm the
utility of PCA3 to predict the outcome of a biopsy in men who have had
a prior negative biopsy, while about 16 demonstrate that PCA3 could
also be useful in allowing discrimination between indolent and
aggressive prostate cancer.

Interestingly, some studies in diverse populations from around the world
have also demonstrated that urinary PCA3 scores could predict the
presence of prostate cancer prior to an initial prostate biopsy. At
least six different studies performed on more than 6,000 men support
this outcome, some even providing evidence that a higher PCA3 score
correlates with aggressive disease and a high Gleason score. It is also
interesting to note that the relationship of PCA3 to disease volume and
grade is currently the object of studies in men enrolled in prospective
active surveillance programs. For example, the Canary PASS study of
prostate cancer patients under active surveillance, provides
preliminary evidence that PCA3 allows discrimination between men at
risk of aggressive cancer and those who could be placed on less
intensive surveillance protocols with fewer repeated prostate biopsies,
reducing the risks and costs of invasive procedures.

About DiagnoCure

DiagnoCure (TSX: CUR; OTCQX: DGCRF) is a life sciences corporation that
develops and commercializes high-value cancer diagnostic tests that
increase clinician and patient confidence in making critical treatment
decisions. In 2008, the Corporation launched a colorectal cancer
staging test through its U.S. CLIA laboratory. Previstage(TM) GCC is currently available for licensing. The Corporation has granted a
worldwide exclusive license on the diagnostic applications of its
proprietary molecular biomarker PCA3 to Gen-Probe, now a wholly-owned
subsidiary of Hologic Inc. Hologic Gen-Probe’s PROGENSA® PCA3 prostate
cancer test is commercialized in Europe under CE mark and is approved
for commercialization in Canada and the United States. For more
information, please visit www.diagnocure.com.

Forward looking statements

This release may contain forward looking statements that involve known
and unknown risks, uncertainties and assumptions that may cause actual
results to differ materially from those expected. Forward-looking
statements can be identified by the use of the conditional or
forward-looking terminology such as “anticipates”, “assumes”,
“believes”, “estimates”, “expects”, “intend”, “may”, “plans”,
“projects”, “should”, “will”, or the negative thereof or other
variations thereon. Forward-looking statements also include any other
statements that do not refer to historical facts. All such
forward-looking statements are made pursuant to the “safe-harbour”
provisions of applicable Canadian securities laws. 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. Forward-looking
statements are presented for the purpose of assisting investors and
others in understanding certain key elements of the Corporation’s
current objectives, strategic priorities, expectations and plans, and
in obtaining a better understanding of the Corporation’s business and
anticipated operating environment. Readers are cautioned that such
information may not be appropriate for other purposes and that they
should not place undue reliance on these forward looking statements.
For instance, any forward-looking statements regarding the outcome of
research and development projects, clinical studies and future
revenues, including those related to PROGENSA® PCA3, are based on
management expectations and such outcome may vary materially depending
on global political and economic conditions, dependence on
collaboration partners, uncertainty of healthcare reimbursement, and
marketing and distribution challenges. 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.


Source: PR Newswire



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