MED BIOGENE REPORTS FINANCIAL RESULTS FOR Q2 2011
Med BioGene Inc. has released its financial results for the six months ended June 30, 2011 (all amounts are in United States dollars).
Erinn Broshko, MBI's chief executive officer, stated: "Med BioGene started 2011 with the announcement and subsequent closing in April of our global commercialization partnership with Precision Therapeutics for LungExpress Dx. We have now received from Precision the $2.3-million of licence fees and research reimbursement and are eligible for additional milestone and royalty payments. Precision has been making progress in establishing an advisory board comprised of the world's leading clinicians and researchers in lung cancer and in moving LungExpress Dx toward commercialization. We are very pleased with the progress and prospects for success."
Business highlights
- April 15, 2011 -- MBI closed its commercialization, licence and research reimbursement agreement with Precision Therapeutics. The agreement provides to Precision exclusive global rights to develop and commercialize LungExpress Dx.
Under terms of the agreement, Precision has paid to MBI licence fees and research reimbursement of $2.3-million, half of which is credited against future royalties that may be owed to MBI by Precision. In addition, MBI is eligible to receive up to $1.0-million in payments based on achievement of certain milestones associated with the development and commercialization of LungExpress Dx, all of which are credited against future royalties that may be owed to MBI by Precision. MBI will receive royalty payments based on a market percentage rate of Precision's future revenues associated with the commercialization of LungExpress Dx or any other products incorporating MBI's technology. Precision is responsible for all future costs associated with the development and commercialization of LungExpress Dx.
Precision is a Pittsburgh-based, private venture-capital-backed company. MBI and Precision believe that LungExpress Dx will be a synergistic and important addition to Precision's flagship test, ChemoFx. Whereas LungExpress Dx can identify early non-small-cell-lung-cancer-stage (NSCLC) patients who have a poor prognosis and may benefit from chemotherapy, ChemoFx seeks to quantify an individual patient's probable tumour response to various chemotherapeutic and biologic agents. In 2010, Precision received approximately 21,500 live tissue specimens for its ChemoFx test from across all 50 states (as well as certain countries outside the U.S.), of which more than 15 per cent were in NSCLC.
Precision intends to apply the same commercial and clinical strategy applied to ChemoFx pertaining to clinical trial validation, selling and marketing and test reimbursement to LungExpress Dx to drive increasing awareness, acceptance and adoption of LungExpress Dx as a stand-alone product and as a complement to ChemoFx.
Precision has approximately 270 employees, including a selling and marketing team consisting of more than 70 employees who currently work with over 700 treating physicians in oncology. Precision performs all clinical testing at its certified laboratories in Pittsburgh.
Second quarter 2011 financial results
MBI reported net income of $215,034 (nil per share) for the six months ended June 30, 2011, compared with a loss of $1,005,583 (one cent per share) for the six months ended June 30, 2010. MBI generated licensing revenue of $593,714 during the six months ended June 30, 2011, but did not generate any revenue during the six months ended June 30, 2010.
Research and development
Research and development expenses were $108,649 for the six months ended June 30, 2011, compared with $380,408 for the six months ended June 30, 2010, representing a decrease of 71 per cent.
General and administrative
General and administrative expenses were $259,184 for the six months ended June 30, 2011, compared with $586,431 for the six months ended June 30, 2010, representing a decrease of 56 per cent.
Liquidity and capital resources
At June 30, 2011, MBI had cash and equivalents totalling $378,852 and a working capital deficiency of $1,089,662, compared with cash and equivalents of $126,797 and a working capital deficiency of $1,570,261 at Dec. 31, 2010. Subsequent to June 30, 2011, under the terms of the commercialization agreement, Precision paid to MBI the final instalments of the aggregate $2.3-million in licence fees and research reimbursement, being $1.7-million. Such total amount paid by Precision to MBI, not including research reimbursement allocated to such amount totalling over $1-million, is subject to MBI's obligation to pay to the University Health Network royalties of a percentage in the high teens pursuant to the sublicensing of technology licensed by MBI from the University Health Network.
Cash provided by operating activities was $86,988 in the six months ended June 30, 2011, compared with cash used in operating activities of $251,970 in the six months ended June 30, 2010.
Cash provided by financing activities was $212,930 in the six months ended June 30, 2011, compared with cash used in financing activities of $838,254 in the six months ended June 30, 2010.
We seek Safe Harbor.
Exakt