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More than 50,600 tests were processed by the Company's joint-venture, Innovative Diagnostic Laboratory, LLP ("IDL") in the quarter
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Raised more than $7 million in non-brokered private placement to support growth strategy
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Subsequent to quarter-end, in-licensed two innovative new biomarker assays that aid physicians in identifying those females at highest risk for breast cancer
TORONTO, Nov. 12, 2014 (GLOBE NEWSWIRE) -- GeneNews Limited (TSX:GEN) ("GeneNews" or the "Company") today reported operational and financial results for the three-month period ended September 30, 2014. All dollar amounts are expressed in Canadian currency unless otherwise indicated and results are reported in accordance with International Financial Reporting Standards.
With a successful limited scale launch of IDL's operations in the fourth quarter of 2013, full scale up activities began in Q1-2014, including growing IDL's lab capacity, increasing the size and scope of its sales organization and expanding the menu of novel, proprietary tests offered by it throughout the United States.
"We continued to see overall testing volume and revenue growth during the quarter," commented GeneNews' Executive Chairman, James Howard-Tripp. "This was achieved during a period in which we made a number of refinements to our sales organization, including some limited personnel changes and a re-deployment of resources toward those local markets that we have identified as having the greatest potential for commercial success."
"The fact that overall test volumes increased in the third quarter despite the refinements we are making to the sales force serves to validate the strength of IDL's model, designed to help stratify commercial risk by leveraging multiple test offerings to provide a smoother growth curve and more predictable revenue stream," continued Mr. Howard-Tripp.
Revenues earned by IDL for the third quarter of 2014 were approximately $4.7 million (US$4.4 million) with costs incurred of approximately $8.1 million (US$7.4 million), resulting in a quarterly IDL loss of approximately $3.4 million (US$3.1 million). As GeneNews has joint control of IDL with its American partners, the Company accounts for its interest in IDL using the equity method. As such, GeneNews reflects its share of the total revenues less total expenses in its consolidated statements of loss and comprehensive loss, which was $1.1 million (US$1.0 million) for the third quarter of 2014.
IDL estimates that approximately 70–75% of the patients that have elected to have the ColonSentry® test are covered by private insurers with the remainder of patients undergoing the test are covered by Medicare. Reimbursement from Medicare has not been forthcoming as ColonSentry® is not approved for coverage. As a relatively new entity, IDL does not yet have a history of collections of invoiced test revenue and recognizes revenue only upon receipt of payment from its customers. As a result of customary lag times between when a test is processed and payment is received, IDL's test volumes to date are not yet fully reflected in its financial results.
For the three months ended September 30, 2014, GeneNews' total revenues were approximately $1.1 million as compared to $nil in the same period in 2013. The net loss for the third quarter of 2014 was approximately $0.9 million, or $0.02 loss per common share, as compared to a net loss of approximately $3.4 million, or $0.10 loss per common share, for the same three-month period in 2013.
The Company ended the third quarter with cash and cash equivalents amounting to approximately $4.4 million.
Subsequent to the end of the quarter, the Company in-licensed two biomarker assays from German-based sphingotec GmbH - sphingotest® pro-NT and sphingotest® pro-ENK – that aid physicians in identifying those females at highest risk for breast cancer in the general population. GeneNews expects to add sphingotest® pro-NT to the menu of advanced cancer assays offered by IDL in early 2015. The Company is also evaluating the potential expansion of IDL's testing menu in the area of breast cancer risk prediction through the addition of sphingotest® pro-ENK and other biomarker candidates.
Mr. Howard-Tripp concluded, "sphingotest® pro-NT will be the third new, innovative advanced cancer assay added to our offering menu beyond ColonSentry®, and we are not stopping there. Indeed, we are currently in discussions with several other entities with respect to in-licensing their technologies. As always, we look forward to updating our stakeholders as we progress."
The Company's financial statements and management's discussion and analysis are available on www.sedar.com.
About GeneNews
GeneNews is focused on developing and commercializing proprietary molecular diagnostic tests for the early detection of diseases and personalized health management, with a primary focus on cancer-related indications. The Company's lead product, ColonSentry®, is the world's first blood test to assess an individual's current risk for colorectal cancer. In 2013, GeneNews created a U.S. joint venture, Innovative Diagnostic Laboratory, LLP ("IDL"), that it is committed to help become a leader in molecular diagnostics and personalized medicine, serving as a strong commercialization outlet for advanced cancer tests. Taking a multi-view approach to the diagnosis and treatment of cancer, IDL is working to assemble, through a combination of internal pipeline development, third-party licenses and potential acquisitions, a robust menu of novel, proprietary tests to be offered by it throughout the United States. GeneNews' common shares trade on the Toronto Stock Exchange under the symbol 'GEN'. More information on GeneNews and IDL can be found at www.GeneNews.com and www.MyInnovativeLab.com, respectively.
Forward-Looking Statements
This press release contains forward-looking statements identified by words such as "expects", "will" and similar expressions, which reflect the Company's current expectations regarding future events, including the launch of ColonSentry® test across the United States and the assembling of a robust menu of other advanced cancer tests to be offered by IDL. The forward-looking statements involve risks and uncertainties, including market reaction to the launch of the ColonSentry® test into new regions, that could cause the Company's actual events to differ materially from those projected herein. Investors should consult the Company's ongoing quarterly filings and annual reports for additional information on risks and uncertainties relating to these forward-looking statements. The reader is cautioned not to rely on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements, except as required by law.
CONTACT: Company Contact:
James R. Howard-Tripp
Executive Chairman
Office: (905) 209-2030
jhoward-tripp@genenews.com
Investor & Media Contact:
Stephen Kilmer
Kilmer Lucas Inc.
Office: (212) 618-6347
Mobile: (905) 906-6908
stephen@kilmerlucas.com
