SQI Diagnostics Inc. (TSX-V: SQD), a life sciences and
diagnostics company that develops and commercializes proprietary
technologies and products for advanced microarray diagnostics, today
announced its financial and operational results for the third
quarter-ended June 30, 2013.
Highlights of Commercial Progress
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During the quarter the company executed two master services agreements
with two global Pharma companies to develop proof-of-concept
immunogenicity assays in its Diagnostics Tools and Services business.
These global Pharma projects allow SQI to leverage its existing IVD
technology and existing platforms to address the needs of
pharmaceutical companies in the drug testing market. The names of the
global pharmaceutical companies have been omitted owing to
confidentiality agreements with both of the entities and SQI
Diagnostics
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Global Pharma 1: During and subsequent to quarter-end
SQI completed commercialization milestones in the development of a
proof-of-concept anti-drug-antibody (“ADA”) assay to detect and
quantify the immune responses to a new class of drugs. The target drug
is in the pre-human phase and as such this provides SQI the
opportunity to win commercial business at the earliest phases of
clinical work and could lead to incorporating SQI’s products in all of
the subsequent phases of human clinical trials. The multiplex
proof-of-concept product, completed August 15, demonstrated one
hundred percent agreement in primates and excellent agreement in the
other two species when compared to the single-plex tests currently
used by Global Pharma 1. Other performance criteria of the tests,
including sensitivity, have exceeded project goals. Owing to the
achievement of all project milestones, an on-site evaluation of the
assay on SQI’s SQiD-X system is being planned. Successful
demonstration of the proof-of-concept is expected to result in the
sale of one or more SQiDlite™ platforms as well as the multiplex
Custom PLEX test kits that would be used in the target customer’s
clinical testing throughout drug development.
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Global Pharma 2 - project 1: SQI completed all
development milestones for the previously disclosed proof-of-concept
assay in collaboration with Global Pharma 2. This Custom PLEX ADA
assay will measure the immune responses in clinical trials to one of
the customer's in-development biologic drugs. This 21 biomarker assay
takes full advantage of SQI’s multiplexing capabilities and has met or
exceeded all project goals. The target drug used in this
proof-of-concept project is in Global Pharma 2’s clinical trials and
if adopted commercially, SQI’s Custom PLEX ADA product would be used
for testing during human clinical trials. The Company expects to
deliver Custom PLEX ADA kits in September that will be evaluated for
commercial feasibility by Global Pharma 2.
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Global Pharma 2 - project 2: SQI also made significant
progress on the commercial demonstration of an 8-plex cytokine assay
for Global Pharma 2. SQI Diagnostics completed all project work on the
Ig_PLEX Cytokine assay and delivered a SQiD-X platform to the
customer’s site on August 9, 2013 to enable evaluation of the Ig_PLEX
Cytokine assay by the customer. The evaluation is expected to be
completed within 30 days. Successful evaluation of the ADA Custom PLEX
proof-of-concept and the Ig_PLEX Cytokine assay are expected to result
in the sale of test kits and SQiDlite platforms for use in the
customer's drug development programs. Cytokine assays are commonly
used in clinical trials during the development of many classes of
drugs and SQI Diagnostics expects to widely market its cytokine
products.
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The positive results of the proof-of-concept assay targeted at
immunogenicity testing of heparin in collaboration with Algorithme
Pharma were presented at the 14th Annual Immunogenicity for
Biotherapeutics Conference in Baltimore held 18-20 March. The Company
is participating in on-going marketing efforts with Algorithme Pharma
which strategically target commercial opportunities with global
pharmaceuticals. Subsequent to quarter-end, SQI delivered a diagnostic
system to Algorithme Pharma for further collaborative sales
initiatives and in preparation for the marketing webinar titled “A
Multiplexed Approach for Immunogenicity Assessment Using the New
SQiDlite System: Case Study Analysis” held on July 11.
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During the quarter, the Company continued to execute its validation
plan for Ig_PLEX Celiac DGP. The Company expects to complete the
validation work required for regulatory submission in calendar 2013
and to file with the FDA and Health Canada shortly thereafter;
however, the Company will continue to prioritize projects in favour of
those with near-term revenue prospects.
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On May 2, 2013 the Company completed a non-brokered private placement
of 5,126,044 units of the Company at $0.75 per unit for gross proceeds
of $3,845,000. Each unit consists of one common share and one common
share purchase warrant. Each common share purchase warrant entitles
the holder to purchase one common share at a price of $1.10 for a
period of two years from the date of issuance.
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The Company previously announced that a special committee was
established to review strategic alternatives. Subsequent to
quarter-end and in light of the recent commercial progress with the
Diagnostic Tools and Services offering the Company and its Board of
Directors has decided to place the assessment of strategic
alternatives on hold and the special committee was disbanded.
“SQI has made significant commercial progress in the quarter having
rapidly completed multiple Custom PLEX collaborations, meeting or
exceeding our agreed to performance targets,” said Andrew Morris,
President and CEO of SQI Diagnostics. “We are excited to see the
benefits of our platforms and technology being recognized by our Global
Pharma collaborators and expect to grow these relationships into
successful commercial arrangements.”
Financial Results
For the quarter-ended June 30, 2013, the Company recorded a net loss of
$1,740,000 ($0.04 net loss per share) compared to a net loss of
$1,585,000 ($0.04 net loss per share) for the quarter-ended June 30,
2012. The net loss for the nine months ended June 30, 2013 was
$4,654,000 ($0.11 net loss per share) compared to a net loss of
$4,584,000 ($0.13 net loss per share) for the nine months ended June 30,
2012.
R&D expenditures, excluding amortization and stock based compensation,
for the quarter-ended June 30, 2013 were $895,000 compared to $672,000
for the quarter-ended June 30, 2012. R&D expenditures, excluding
amortization and stock based compensation, for the nine months ended
June 30, 2013 were $2,228,000 compared to $2,237,000 for the nine months
ended June 30, 2012. The R&D expenditures in the three and nine months
ended 2013 have been focussed on projects to demonstrate the Company’s
ability to rapidly develop proof-of-concept assays for our Diagnostic
Tools and Services customers in the large Pharma markets as well as the
completion of on-going validation of the Celiac DGP assay.
Corporate and general expenses, excluding stock-based compensation,
totalled $453,000 and $1,234,000 for the three and nine months ended
June 30, 2013, respectively. Corporate and general expenses, excluding
stock-based compensation, totalled $528,000 and $1,300,000 for the three
and nine months ended June 30, 2012, respectively.
Sales and marketing expenses were primarily related to sales and
marketing consultant fees and to travel related to selling activities in
the quarter. Sales and marketing expenses, excluding stock based
compensation, totalled $88,000 for the three months ended June 30, 2013
compared to $57,000 for the three months ended June 30, 2012. Sales and
marketing expenses, excluding stock based compensation, totalled
$299,000 for the nine months ended June 30, 2013 compared to $181,000
for the nine months ended June 30, 2012. The increase in sales and
marketing expenses for the three and nine months ended June 30, 2013
compared to the three and nine months ended June 30, 2012 was primarily
a result of the addition of a senior sales contractor in June of 2012
and increased expenditures on sales travelling, conferences, and
marketing materials as the Company focuses on creating and developing
sales opportunities for its Diagnostic Tools and Services business.
At June 30, 2013, current assets were $3,178,000 compared to $4,208,000
at September 30, 2012. Working capital as at June 30, 2013 was
$2,698,000 compared to $3,190,000 at September 30, 2012.
Detailed financial statements and the MD&A are available at www.sedar.com.
About SQI Diagnostics
SQI Diagnostics is a life sciences and
diagnostics company that develops and commercializes proprietary
technologies and products for advanced microarray diagnostics. The
Company’s proprietary microarray tests and fully-automated systems are
designed to simplify protein and antibody testing workflow, increase
throughput, reduce costs and provide excellent data quality. For more
information, please visit www.sqidiagnostics.com.
FORWARD-LOOKING INFORMATION
This press release contains certain forward-looking statements,
including, without limitation, statements containing the words “may”,
“plan”, “will”, “estimate”, “continue”, “anticipate”, “intend”,
“expect”, “believe”, “in the process”, “is subject to” and other similar
expressions which constitute “forward-looking information” within the
meaning of applicable securities laws. Forward-looking statements
reflect the Company's current expectation and assumptions, and are
subject to a number of risks and uncertainties that could cause actual
results to differ materially from those anticipated. These
forward-looking statements involve risks and uncertainties including,
but not limited to, our need for additional capital to sustain our
business, statements with respect to sales of our IgX plex™ products and
SQiDworks and other analytical systems, agreements and future agreements
to sell our products, the success of our Diagnostic Tools and Services
business and our intent to build near-term revenue streams from this
business, the completion of our second-generation SQiDlite platform, the
build-out of our portfolio of immunoassay tests, the successful
regulatory filing and receipt of regulatory approvals for our later
stage quantitative diagnostic kits , the acceleration of our revenue
ramp, general economic and market segment conditions, competitor
activity, technology changes and regulatory approvals. Such statements
reflect the current views of the Company with respect to future events
and are subject to certain risks and uncertainties and other risks
detailed from time-to-time in the Company’s ongoing filings with the
securities regulatory authorities, which filings can be found at www.sedar.com.
Actual results, events, and performance may differ materially. Readers
are cautioned not to place undue reliance on these forward-looking
statements. The Company undertakes no obligation to publicly update or
revise any forward-looking statements either as a result of new
information, future events or otherwise, except as required by
applicable securities laws.
This news release does not constitute an offer to sell or a
solicitation of an offer to sell any of the securities in the United
States. The securities have not been and will not be registered under
the United States Securities Act of 1933, as amended (the "U.S.
Securities Act") or any state securities laws and may not be offered or
sold within the United States or to U.S. persons unless registered under
the U.S. Securities Act and applicable state securities laws or an
exemption from such registration is available.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
Copyright Business Wire 2013