Spectral Announces Third Quarter Results

TORONTO, Nov. 14, 2018 (GLOBE NEWSWIRE) -- Spectral Medical Inc., (TSX: EDT), a Phase III company developing the first treatment for patients with septic shock guided by a companion diagnostic, today announced its unaudited financial results for the third quarter ended September 30, 2018.

Financial Review

Revenue for the three-months ended September 30, 2018 was $579,000 compared to $820,000 for the same period in the preceding year. For the nine-months ended September 30, 2018 revenues were $1,976,000 compared to $2,785,000 in the nine-months ended September 30, 2017.

Royalty revenue from one customer has decreased from $1,264 (US$966) to $168 (US$130) for the first nine-months of 2018, due to the expiry of certain patents. As a result, the Company entered into a technology transfer agreement (the “Agreement”) whereby it transferred certain technology and related materials to this customer. The Agreement will generate approximately $2,000 in additional revenue over 2018 and 2019, upon the fulfillment of four milestones. On November 5, 2018, the Company completed its first milestone under the Agreement and is entitled to receive payment of US$271. As all royalty revenue contracts related to the Company’s biological reagents will expire by the end of 2019, the Company intends to negotiate similar agreements over the next several months. In addition to technology transfers, the Company will increase the unit price of its reagents to offset the loss in royalty revenue.

Operating costs for the quarter ended September 30, 2018 amounted to $1,288,000 compared to $1,677,000 in 2017. Operating costs for the nine-months ended September 30, 2018 were $4,909,000, a decrease of $876,000 from $5,785,000 for the first nine months of 2017. Most of the Company’s expenses are incurred in its Phase III clinical trial and regulatory program and will vary depending on the timing and determination of the regulatory path forward. Apart from clinical trial and regulatory activities, the Company continues to maintain a low cost operating structure for its base business operations.

For the three-months ended September 30, 2018, the Company reported a loss of $709,000 ($0.003 per Share) compared to a loss of $857,000 ($0.004 per Share) for the three-months ended September 30, 2017. The loss for the nine-months ended September 30, 2018 was $2,933,000 ($0.013 per Share) compared to $3,000,000 ($0.014 per Share) for the same nine-month period in the prior year.

The Company concluded the third quarter of 2018 with cash on hand of $4,567,000 compared to $1,449,000 as of December 31, 2017.

The total number of shares outstanding for the Company was 225,591,183 as at September 30, 2018.

Regulatory update

The Company continues its dialogue with the U.S. FDA concerning the planning of the TIGRIS trial and anticipates that an agreement could be reached in calendar year 2018 as to the clinical trial protocol and the Statistical Analysis Plan.

About Spectral

Spectral is a Phase III company seeking U.S. FDA approval for its unique product for the treatment of patients with septic shock, Toraymyxin™ (“PMX”). PMX is a therapeutic hemoperfusion device that removes endotoxin, which can cause sepsis, from the bloodstream and is guided by the Company's Endotoxin Activity Assay (EAA™), the only FDA cleared diagnostic for the risk of developing sepsis.

PMX has been approved for therapeutic use in Japan and Europe, and has been used safely and effectively on more than 150,000 patients to date. In March 2009, Spectral obtained the exclusive development and commercial rights in the U.S. for PMX, and in November 2010, signed an exclusive distribution agreement for this product in Canada. Approximately 350,000 patients are diagnosed with severe sepsis and septic shock in North America each year. Spectral is listed on the Toronto Stock Exchange under the symbol EDT. For more information, please visit www.spectraldx.com

Forward-looking statement

Information in this news release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Implicit in this information, particularly in respect of the future outlook of Spectral and anticipated events or results, are assumptions based on beliefs of Spectral's senior management as well as information currently available to it. While these assumptions were considered reasonable by Spectral at the time of preparation, they may prove to be incorrect. Readers are cautioned that actual results are subject to a number of risks and uncertainties, including the availability of funds and resources to pursue R&D projects, the successful and timely completion of clinical studies, the ability of Spectral to take advantage of business opportunities in the biomedical industry, the granting of necessary approvals by regulatory authorities as well as general economic, market and business conditions, and could differ materially from what is currently expected.

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this statement.

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