Spectral Medical Provides Corporate Update

• The Company remains well positioned with financial strength

• COVID-19 patients using PMX in the U.S. showing positive signs in recovery

• SAMI used successfully for CRRT in COVID-19 patients

TORONTO, April 28, 2020 (GLOBE NEWSWIRE) -- Spectral Medical Inc. (“Spectral” or the “Company”) (TSX: EDT), a late stage theranostic company advancing therapeutic options for sepsis and septic shock, released an update today on the impact of COVID-19 on the Company’s business, the measures it has put in place, accordingly, and its long-term strategy.

PMX COVID-19 and Tigris Trial Update

Prior to March 11, 2020, when the World Health Organization declared the novel coronavirus, which has the potential to cause severe respiratory illness (“COVID-19”), a global pandemic, the Tigris trial had nine clinical sites screening and open to enrollment of patients, with the remaining one site finalizing administrative procedures prior to its activation. The State emergency declarations combined with the subsequent decision by the U.S. and Canadian governments to close the border had an impact on Spectral’s access to Tigris site ICUs, with all ICUs diverting their resources and focus on either preparing for, or treating COVID-19 positive patients. In February, Spectral aligned its clinical resources and activities to support these trial sites in their efforts with COVID-19, while implementing strategies that would keep their clinical EAA and PMX skills active.

There is a very strong scientific case for the use of PMX in COVID-19 patients. Endotoxin is the primary driver of the cytokine storm and there is reliable evidence that removing endotoxin by the PMX cartridge, reduces circulating levels of cytokines. Increased levels of endotoxin activity as measured by Spectral’s FDA approved Endotoxin Activity Assay (EAA) have been identified in COVID-19 patients in the U.S., Italy and Asia.

PMX has been used to treat patients outside the U.S. during other analogous viral pandemics including the avian flu (H5N1) and the swine flu pandemic (H1N1) which also resulted in acute respiratory distress. In previous publications, the use of PMX in septic shock patients has resulted in decreased dependency on ventilators, which is a serious issue during this COVID-19 pandemic. The publications data showed improvement in chest x-ray results, improved lung function and successful wean from ventilator.

The Company has taken an active role in contributing to the combat of the COVID-19 pandemic, including the following specific activities:

• Since March, Spectral has fielded unsolicited inbound inquiries from hospitals in North America concerning our PMX therapy for the COVID-19 pandemic as it relates to septic shock;
• As a result of these inquiries, the Company released its PMX product to two hospitals. One site is an existing Tigris trial site, while the second site is a NY-based hospital;
• The COVID-19 positive patients were treated, with an average of approximately 2.5 PMX columns administered per treatment. While data collection is not required for the emergency access, elevated EAA levels were detected, and the majority of patients had a rapid and positive response based on lowering oxygen and vasopressor requirements;

US FDA approves Investigational Device Exemption for PMX use in patients with COVID-19 [clinicaltrials.gov: NCT04352985]

• On April 11, 2020, the US FDA approved a supplemental IDE for the use of Spectral’s PMX cartridge in the treatment of patients with COVID-19 as it relates to septic shock;
• The Company collaborated with the FDA, and with its support accelerated the approval process;
• The objective of the IDE supplement is to observe the efficacy of the PMX cartridge with a focus on safety, and allows for an initial 20 sites and 75 patient enrollment, with data collection requirements;
• Existing Tigris sites have been engaged in the supplemental IDE protocol. Participation of these sites provides for a quicker response to COVID-19 treatments, as clinical teams are already trained in administering PMX treatments. The Company is fielding unsolicited inbound inquiries from U.S. hospitals on their desire to participate in the supplemental IDE protocol, and is actively on-boarding select non-Tigris sites.

Health Canada Issues an Interim Order for use of PMX

• We are reaching out to the sites involved in the Euphrates trial, and hospitals covered by our exclusive distribution partner Baxter;
• All participating sites will receive free of charge PMX cartridges and assistance with tech support to initiate.

International Use of EAA and PMX

• The Company reached out to all of its EAA distributors and requested each to provide data with respect to EAA activity levels in COVID-19 patients being treated with PMX;
• Based on feedback from hospitals and EAA distributors received to-date, increased levels of endotoxin activity as measured by Spectral’s FDA approved Endotoxin Activity Assay (EAA) has been identified in COVID-19 patients in the U.S., Italy and Asia region;
• Preliminary data from Italy suggests high incidence of endotoxin activity (EAA in the 0.6-0.9 range) in COVID-19 patients with septic shock is greater than 50%; as of today we are aware of approximately 20 COVID-19 septic shock patients that have been treated with PMX, globally.

“The Company continues to focus on finalizing the Tigris trial within the shortest timelines,” said Debra Foster, VP of Clinical Development at Spectral. “While the COVID-19 pandemic has created some unanticipated hurdles to the Tigris trial, it has also created some very positive opportunities for both the PMX product and the Tigris trial. We are observing a heightened awareness amongst ICU investigators, and clinicians of PMX, and through our recent COVID-19 FDA and Health Canada approvals, we are seeing broader utilization of PMX than we would typically see under a normalized, non-COVID-19 environment. With this increased utilization, we are now likely better positioned to benefit from supportive data collection on PMX use.”

The Company is encouraged by early results of its Tigris trial and the mortality outcome data to-date. However, the Company cautions that the existing randomized patient sample size is limited, and there is no guarantee of a positive FDA approval outcome. Tigris trial recruitment activity slowed at the beginning of March 2020, with patient enrolment mostly impacted at the three sites which had finalized training and had been activated in late 2019. The other six sites that are now open for enrolment had finalized their clinical training in late January and early February, and it typically takes three months post-clinical training for sites to enroll their first patient. Accordingly, these six sites were not projected to reach their normalized enrolment rate until May 2020. However, should the COVID-19 pandemic in the U.S. prolong limited ICU access at the Tigris sites, there could be significant risk that last patient enrolment could be delayed. Spectral has developed mitigation strategies to reduce or eliminate any timing delays, including:

• COVID-19 supplemental IDE protocol keeps current Tigris site clinician skills current for EAA and PMX;
• Spectral’s clinical team keeps weekly communication with sites and their CRAs. It has been noted by site investigators that there may be a staggered re-opening of ICUs across the U.S., as many regions and states are experiencing staggered peak COVID-19 infections and recoveries;
• Potentially increase the number of sites in the Tigris trial. Spectral is evaluating potential sites for its FDA supplemental IDE, which could subsequently be added to the Tigris trial;
• Should the data collected under the supplemental IDE protocol be robust, Spectral would propose to use the data to be supportive of the PMA for the PMX cartridge;
• The Company has developed comprehensive on-line training and site support which can be utilized until the Canada – U.S. border re-opens.

Dialco Update

Dialco, a wholly-owned subsidiary of Spectral, recently passed its one-year anniversary and many milestones have been accomplished in this short amount of time. Dialco continues its commercial activities with SAMI, Dialco’s proprietary Continuous Renal Replacement Therapy (“CRRT”) instrument. SAMI continues successful clinical evaluation in key hemodialysis centres, and building its commercial sales pipeline. With respect to DIMI, a renal replacement instrument focused on the home dialysis market, Dialco continues on its path seeking FDA regulatory approval.

“Dialco has not experienced any negative impacts due to the COVID-19 pandemic,” said Gualtiero Guadagni, President of Dialco. “Based on our interaction with the FDA, it appears the regulatory approval timelines, with respect to DIMI are status quo. In our SAMI business, we are seeing increased commercial activity in part due to the COVID-19 pandemic. As hospitals are expecting a significant shortage of CRRT machines in COVID-19 impacted ICUs, we have experienced increased activity around SAMI, including the use of SAMI in the treatment of COVID-19 positive patients.”

Recent Dialco Highlights:

• SAMI instrument was successfully used to treat a young patient with COVID-19 under an Emergency access request for the PMX cartridge;
• Recently deployed SAMI devices utilized at a prominent U.S. university in the treatment of COVID-19 positive patients with renal failure. The U.S. university decided to move forward with the implementation of SAMI to address the increase in AKI patients in view of a shortage of CRRT machines due to COVID-19;
• Successful remote installation, set-up and high-level training on-line of SAMI. While COVID-19 has negatively impacted the ability of our field resources to access ICUs, Dialco was able to successfully ship and set-up five SAMI machines without major issues;
• Presently, Dialco is corresponding with the FDA, concerning DIMI‘s 510k application which includes the needs for further biocompatibility and electromagnetic capability analysis which are being conducted by certified labs. While a competitive device was recently approved for home hemodialysis use by the FDA, the Company believes this event continues to validate Dialco’s decision to enter the dialysis market. Additionally, to the Company’s knowledge DIMI remains the only machine capable of both PD and HD for home use.

Corporate Activities Update

• Exploration of a senior U.S. listing: The Company has been studying the potential benefits of a secondary listing on a senior U.S. exchange. Based on the stage of development of the Company, management’s observations regarding the market for peers of the Corporation whose securities are listed on a stock exchange in the U.S., the Company believes that there are potential benefits of a U.S. listing, including a potential increase in long-term shareholder value creation through broader exposure of sell-side and buy-side investment industry players. The Company will determine if and when to apply for a listing on a U.S. exchange, and when it is considered in the best interests of Spectral.
• Financial Update: The Company has ample liquidity to weather the COVID-19 pandemic, and execute on its 2020 business plan goals. The Company continues to operate at full staffing levels, and does not anticipate any changes to current staffing levels. Additionally, the Company has not, nor does it intend to avail itself of any COVID-19 government subsidies.

Spectral Outlook

“I am proud of Spectral’s contribution to combat COVID-19. Our entire product portfolio has been utilized during this pandemic, and we will continue to deploy our products until the COVID-19 pandemic ends. We are very pleased with the progress made on both the development of our renal support products and the use of the PMX cartridge in the IDE studies. In addition, we have realized early commercial success with SAMI and have completed a comprehensive distribution agreement for PMX/EAA. I feel we are well positioned to make significant corporate progress in 2020,” said Dr. Paul Walker, President and CEO of Spectral. “While COVID-19 has altered some of Spectral’s short-term priorities, our long-term strategy remains unchanged. Regardless of short term data points, our focus has not changed on obtaining the required approvals and commercialization of our products. The significant clinical unmet need that our products address, and the size of those patient populations have not changed. The value of our greatest assets remain unchanged.”

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 200,000 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 330,000 patients are diagnosed with severe sepsis and septic shock in North America each year.

Spectral, through its wholly owned subsidiary, Dialco Medical Inc. (“Dialco”), is also commercializing a new proprietary platform, “SAMI”, targeting the renal replacement therapy (“RRT”) market. Dialco is also seeking regulatory approval for “DIMI” which is based on the same RRT platform, but will be intended for home hemodialysis use.

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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