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Sontra Medical Corporation Reports Second Quarter 2005 Results and Business Update

Posted on: Wednesday, 10 August 2005, 09:03 CDT

FRANKLIN, Mass., Aug. 10 /PRNewswire-FirstCall/ -- Sontra Medical Corporation has announced financial results for the second quarter and six months ended June 30, 2005. For the three months ended June 30, 2005, the net loss applicable to common stockholders was $1,753,000, or $.08 per share, as compared to $1,407,000, or $.09 per share, for the same period in 2004. For the six months ended June 30, 2005, the net loss applicable to common stockholders was $3,045,000, or $.14 per share, as compared to $2,810,000, or $.19 per share, for the same period in 2004. The Company ended the quarter with $6,833,000 in cash and short-term investments and expects that these funds will be sufficient to fund operations through at least June 2006.

2nd Quarter Product Highlights: SonoPrep(R) and Procedure Tray for Topical Lidocaine * Adoption at first centers of influence, including Connecticut Children's Medical Center and St. Francis Hospital in Hartford, Ct. -- sites of completed and ongoing clinical studies. * Product evaluations continuing at large pediatric hospitals. * Completed test-marketing program targeting pediatrician office practices and planning web-based distribution program. * Commenced clinical studies in blood banking and port access. * Completed development of 2nd generation SonoPrep and transitioning to manufacturing. Continuous Transdermal Glucose Monitoring System * Formed Clinical Advisory Board for hospital critical care glucose monitor. * Completed product development of wireless transmitter and meter for ICU glucose monitor. * Patent granted covering SonoPrep control mechanism that precisely controls the level of skin permeability. Transdermal Vaccination Facilitated by SonoPrep * Completed patient enrollment in two transdermal vaccination studies: -- St. Louis University-influenza vaccine. -- University of Massachusetts Medical Center-hepatitis A vaccine. * Completing blood titers and analyzing results.

"Successful conclusion of the SonoPrep product evaluation by nurses at Connecticut Children's Medical Center in Hartford was a giant step in demonstrating acceptance of our technology," stated Thomas W. Davison, PhD, Sontra's President and Chief Executive Officer. Connecticut Children's Medical Center has been the site of several pediatric clinical studies of SonoPrep as well as other topical anesthetic systems under the direction of Dr. William Zempsky, MD, a leading pediatric pain specialist. Dr. Davison added, "During the second quarter, we completed evaluations of our topical lidocaine product at several major pediatric hospitals that we expect will serve as reference accounts and have increasing product utilization. We also completed a test marketing and distribution program targeting pediatrician office practices in Birmingham, Alabama that will be expanded to include a web-based program."

Dr. Davison continued, "In transdermal continuous glucose monitoring, we have completed the designs of a new telemetry-based sensor and meter and expect to complete prototype fabrication on schedule during 2005 so that validation clinical studies in critical care and diabetes management can commence in 2006. Frequent glucose monitoring and intensive insulin therapy have become a standard of care in critical care medicine, as tight glucose control has been shown to significantly reduce patient mortality, complications, hospital stay and cost. As a result, intensive care nurses are measuring blood glucose for their patients up to every hour in order to adjust insulin infusion rates. Development of our critical care glucose monitor is proceeding in parallel with the development of a product for the $5 billion diabetes home testing market, as the product technologies are the same and designs are very similar."

Conference Call Information

Sontra will host a live conference call and listen-only Webcast on Wednesday, August 10, 2005 at 11 a.m. ET to provide a business update and discuss its second quarter 2005 financial results.

To participate in the conference call, please dial: 1-973-409-9259.

A listen-only Webcast and replay of the conference call will be available at: http://www.sontra.com/

About Sontra Medical Corporation (http:/www.sontra.com)

Sontra Medical Corporation is a technology leader in transdermal science. Sontra's SonoPrep ultrasound-mediated skin permeation technology, combined with technical competencies in transdermal drug formulation, delivery systems and biosensors, is creating a new paradigm in transdermal drug delivery and diagnosis. The SonoPrep technology has demonstrated strong results from its initial human clinical trials at leading universities and medical centers for several billion dollar market opportunities including the transdermal delivery of vaccines and large molecule drugs and continuous non-invasive glucose monitoring. Sontra is currently marketing the SonoPrep device and procedure tray for use with topical lidocaine to achieve rapid (within five minutes) skin anesthesia.

SonoPrep is a registered trademark of Sontra Medical Corporation. All other company, product or service names mentioned herein are the trademarks or registered trademarks of their respective owners.

This press release contains forward-looking statements, which address a variety of subjects including, for example, the expected benefits and efficacy of the SonoPrep device in connection with diagnostics, vaccine delivery, glucose monitoring and transdermal drug delivery, the expected market opportunities, clinical study and product evaluation results, distribution and market acceptance of the SonoPrep device and technology, the expected size of the markets for the SonoPrep device and technology, Sontra's expected ability to form strategic partnerships and commercialize additional products, including for the surgical intensive care unit, and Sontra's business, research, product development, regulatory approval, marketing and distribution plans and strategies. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Such statements are based on our current expectations and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. The following important factors and uncertainties, among others, could cause actual results to differ materially from those described in these forward- looking statements: adverse results in product development, clinical trials, product evaluations, commercialization efforts, product distribution and market acceptance; difficulties or delays in obtaining regulatory approvals to market products resulting from development efforts; difficulties or delays associated with sources of regulatory-approved transdermal drugs and vaccines; failure to obtain and maintain patent protection for discoveries; commercial limitations imposed by patents owned or controlled by third parties; dependence upon strategic partners and third-party distributors to develop, commercialize, market and sell products based on our work; the commercial success of products; and the requirement for substantial funding to conduct research and development and to expand commercialization, distribution and marketing activities. For detailed information about factors that could cause actual results to differ materially from those described in the forward- looking statements, please refer to Sontra's filings with the Securities and Exchange Commission, including Sontra's most recent Quarterly Report on Form 10-QSB. Forward-looking statements represent management's current expectations and are inherently uncertain. We do not undertake any obligation to update forward-looking statements made by us.

SONTRA MEDICAL CORPORATION Consolidated Statements of Loss (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2005 2004 2005 2004 Product revenue $32,350 $2,500 $148,403 $2,500 Cost of product revenue 16,706 801 96,859 801 Gross profit 15,644 1,699 51,544 1,699 Operating Expenses: Research and development 1,039,495 662,617 1,945,796 1,338,524 Selling, general and administrative 784,967 566,202 1,253,775 1,093,696 Total operating expenses 1,824,462 1,228,819 3,199,571 2,432,220 Loss from operations (1,808,818)(1,227,120) (3,148,027) (2,430,521) Interest income 59,451 17,528 107,480 31,757 Interest expense (2,005) - (2,005) - Net loss (1,751,372)(1,209,592) (3,042,552) (2,398,764) Accretion of dividend and beneficial conversion feature on Series A Convertible Preferred Stock (1,463) (197,539) (2,910) (410,973) Net loss applicable to common shareholders $(1,752,835)$(1,407,131)$(3,045,462)$(2,809,737) Net loss per common share, basic and diluted $(0.08) $(0.09) $(0.14) $(0.19) Basic and diluted weighted average common shares outstanding 22,192,296 16,146,758 22,162,144 14,428,905 SONTRA MEDICAL CORPORATION Consolidated Balance Sheets As of June 30, December 31, 2005 2004 (Unaudited) ASSETS Current Assets: Cash and cash equivalents $832,618 $2,565,244 Short term investments 6,000,000 6,950,000 Accounts receivable - 16,821 Legal settlement receivable - 250,000 Inventory, net of reserve for obsolescence 187,443 152,642 Prepaid expenses and other current assets 84,585 69,492 Total current assets 7,104,646 10,004,199 Property and Equipment, at cost: Computer equipment 217,535 206,970 Office and laboratory equipment 608,854 492,377 Furniture and fixtures 14,288 14,288 Manufacturing equipment 192,521 182,210 Leasehold improvements 177,768 174,698 1,210,966 1,070,543 Less-Accumulated depreciation and amortization (739,970) (655,242) Net property and equipment 470,996 415,301 Other Assets: Restricted Cash 29,248 38,997 Other Assets 2,000 2,000 Total other assets 31,248 40,997 Total assets $7,606,890 $10,460,497 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $276,058 $358,530 Current portion of note payable 55,437 - Accrued expenses 435,093 759,051 Total current liabilities 766,588 1,117,581 Note Payable, net of current portion 172,074 - Commitments Stockholders' Equity: Series A Convertible Preferred Stock, $0.01 par value, authorized 7,000,000 shares, issued and outstanding 73,334 shares at June 30, 2005 and December 31, 2004 (preference in liquidation of $79,201) 79,201 76,291 Common stock, $0.01 par value, authorized 60,000,000 shares, issued and outstanding 22,193,329 shares at June 30, 2005 and 21,935,732 shares at December 31, 2004 221,933 219,358 Additional paid-in capital 32,880,399 32,674,740 Deferred stock-based compensation (88,192) (244,912) Accumulated deficit (26,425,113) (23,382,561) Total stockholders' equity 6,668,228 9,342,916 Total liabilities and stockholders' equity $7,606,890 $10,460,497

Sontra Medical Corporation

CONTACT: Sean Moran, Chief Financial Officer of Sontra MedicalCorporation, +1-508-530-0334

Web site: http://www.sontra.com/

Source: PRNewswire-FirstCall

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