DIAGNOCURE INC. QUEBEC CITY, Jan. 21, 2016 /PRNewswire/ - DiagnoCure, Inc. (TSX: CUR) (OTCQX: DGCRF) ("DiagnoCure" or the "Corporation") today reported financial and operational results for the fourth quarter 2015 and fiscal year ended October 31, 2015. The Corporation announced a net loss of $2,425,901 or $0.05 per share for the fourth quarter ended October 31, 2015, compared to $461,710 or $0.01 per share for the same period in 2014 and a net loss of $3,600,168 or $0.08 per share for fiscal year 2015 compared to $2,032,151 or $0.05 per share for the same period in 2014. Without taking into account the impairment charges of $2,226,672, the net loss for the fourth quarter and fiscal year ended October 31, 2015 would have been respectively $199,229 and $1,373,496. At the end of the quarter, cash and short-term investments stood at $1,108,937 compared to $2,227,326 at the end of fiscal year 2014.
The management proxy circular in connection with the special meeting of shareholders that will be held on February 12, 2016 to approve the transaction related to the PCA3 asset sale and the repurchase by DiagnoCure of the preferred shares held by Gen-Probe Incorporated has now been mailed to DiagnoCure shareholders and is available under DiagnoCure's profile at www.sedar.com. The Board of directors unanimously recommends to vote in favor of the PCA3 asset sale resolution and in favor of the resolution for reduction of stated capital. Assuming shareholder approval and the completion of the transaction, the Corporation will distribute approximately 95% of the cash proceeds received in the transaction ($5,200,000) to its shareholders in a tax-efficient manner.
Besides, the redemption of the preferred shares will remove a potential barrier to additional third-party business arrangements that DiagnoCure intends to pursue in relation to additional assets held by the Corporation, including the Previstagea GCC colorectal cancer staging test, a well-documented and ready-to-market test, and the PCP multi-marker prostate cancer test. Change in the expression pattern of the markers used in the PCP test was associated with a high probability of detecting cancer before the first biopsy. A validation study performed in 2014 showed that the PCP appears to be more suited for risk stratification of high-grade prostate cancers or cancers with a Gleason score equal to or higher than 7.
Since the execution of the Asset Purchase Agreement in December 2015, Management is pursuing a thorough business development effort aimed at developing additional agreements with previous and new prospective partners interested by the above tests, cumulated tax losses which exceed $75 million, or other assets of the Corporation. Discussions are underway with some and management hopes to be able to report more details shortly.
"We are confident that the remaining assets held by the Corporation and the available net loss carry forward provide an exciting business opportunity for the right partner, allowing the Corporation to maximize return to shareholders", stated Dr. Jacques Simoneau, Chairman of DiagnoCure.
Results for the Fiscal Year Ended October 31, 2015
Total revenues for fiscal 2015 were $515,372 compared with $553,140 for 2014. Without taking into account the effect of the exchange rate variation, total revenues decreased by 22%, to US$401K for fiscal 2015 compared with US$491K for 2014. This decrease is mainly attributable to a decrease in PCA3 royalty revenues.
Operating expenses increased by $1,530,249, to $4,115,540, for 2015 from $2,585,291 for 2014. This increase is mainly attributable to the impairment of intangible assets. Total operating expenses increased primarily as a result of the following:
-- Research and development expenses, net of investment tax credits,
increased by $1,695,936, to $2,779,060 for 2015 from $1,083,124 for
2014. This increase in research and development expenses is mostly
attributable to the impairment charges of $2,226,672 of the GCC
intangible asset. Without taking into account the impairment charges,
the research and development expenses, net of investment tax credits,
decreased by $530,736, to $552,388 for 2015 compared with $1,083,124 for
2014. This decrease in research and development expenses is attributable
to the completion of the new multi-marker prostate cancer test
multicenter prospective study.
-- General and administrative expenses decreased by $175,919, to $1,170,092
for 2015 from $1,346,011 in fiscal 2014. This decrease is attributable
to reduction in professional fees and operating expenses.
Based on the above, for fiscal 2015, DiagnoCure recorded a net loss and comprehensive loss of $3,600,168 or $0.08 per share, compared with $2,032,151 or $0.05 per share for fiscal 2014. These results reflect the restructuring charges incurred in fiscal 2015, the operating expenses reduction implemented in the first quarter of 2015, the completion of the multicenter prospective study of the new multi-marker prostate cancer test and the impairment charges of the GCC intangible asset. As at October 31, 2015, cash and short-term investments stood at $1,108,937, down from $2,227,326 as at October 31, 2014. This decrease of $1,118,389 is due to the use of liquidities to finance the operating activities of fiscal 2015. Management estimates the cash burn of fiscal 2016 to be between $800,000 and $900,000 and is satisfied that it has adequate cash resources to finance the Corporation's activities, and will continue to monitor its cash levels.
Results of the Fourth Quarter 2015
Total revenues for the fourth quarter of 2015 were $109,831 compared with $122,254 for the same period of 2014. This decrease of $12,423 or 10% is mostly attributable to PCA3 royalties.
Operating expenses increased by $1,951,768, to $2,535,732 for the fourth quarter of 2015 from $583,964 for the same period of 2014. This increase is mainly attributable to the impairment of intangible assets. Total operating expenses increased primarily as a result of the following:
-- Research and development expenses, net of investment tax credits,
increased by $1,897,931, to $2,173,041 for the fourth quarter of 2015
from $275,110 for the same period of 2014. This increase in research and
development expenses is mostly attributable to the impairment charges of
$2,226,672 of the GCC intangible asset incurred in the fourth quarter of
2015.
-- General and administrative expenses increased by $46,711, to $333,915
for the fourth quarter of 2015 from $287,204 for the same period of
2014. This increase is mainly attributable the depreciation of the
leasehold improvement, following the review of its useful life.
Financial Data
For the periods of Three months ended Year ended
October 31
October 31
--- ----------
2015 2014 2015 2014
---- ---- ---- ----
$ $ $ $
--- --- --- ---
License and royalty
revenues 109,831 122,254 515,372 553,140
------------------- ------- ------- ------- -------
Total revenues 109,831 122,254 515,372 553,140
-------------- ------- ------- ------- -------
Operating expenses
(before stock-based
compensation,
depreciation,
amortization,
impairment, gain on
disposition and
restructuring
charges)
298,396 489,682 1,422,791 2,186,400
--- ------- ------- --------- ---------
Net loss (before
stock-based
compensation,
depreciation,
amortization,
impairment, gain on
disposition and
restructuring
charges)
(188,565) (367,428) (907,419) (1,633,260)
--- -------- -------- -------- ----------
Stock-based
compensation 5,432 10,810 23,887 62,463
------------- ----- ------ ------ ------
Depreciation of
property, plant and
equipment 65,243 13,896 105,373 57,529
-------------------- ------ ------ ------- ------
Amortization of
intangible asset 49,416 69,576 257,280 278,899
----------------- ------ ------ ------- -------
Impairment of
intangible asset 2,226,672 2,226,672
----------------- --------- --- --------- ---
Gain on disposition
of property and
equipment (109,427) (109,427)
------------------- -------- --- -------- ---
Restructuring charges 188,964
--------------------- --- --- ------- ---
Net loss (2,425,901) (461,710) (3,600,168) (2,032,151)
-------- ---------- -------- ---------- ----------
Basic and diluted net
loss per share (0.05) (0.01) (0.08) (0.05)
--------------------- ----- ----- ----- -----
Weighted average
number of common
shares outstanding
43,040,471 43,040,471 43,040,471 43,040,471
--- ---------- ---------- ---------- ----------
Consolidated Balance Sheets
As of October 31
----------------
2015 2014
---- ----
Cash and temporary investments 1,108,937 2,227,326
------------------------------ --------- ---------
Total assets 1,789,391 5,532,382
------------ --------- ---------
Shareholders' equity 1,463,292 5,039,573
-------------------- --------- ---------
Number of common Shares outstanding 43,040,471 43,040,471
----------------------------------- ---------- ----------
About DiagnoCure
DiagnoCure (TSX: CUR; OTCQX: DGCRF) is a life sciences corporation that develops and provides molecular and genomic tests to support effective clinical decisions enabling personalized medicine in oncology. Previstagea GCC and the Corporation's PCP multi-marker prostate cancer test are currently available for licensing. The Corporation has granted a worldwide exclusive license on PCA3 for the development and commercialization of a prostate cancer test which is now commercialized in Europe under CE mark and is approved for commercialization in Canada and the United States. For more information, please visit www.diagnocure.com.
Forwardlooking statements
This release may contain forwardlooking statements that involve known and unknown risks, uncertainties and assumptions that may cause actual results to differ materially from those expected. Forward-looking statements can be identified by the use of the conditional or forward-looking terminology such as "anticipates", "assumes", "believes", "estimates", "expects", "intend", "may", "plans", "projects", "should", "will", or the negative thereof or other variations thereon. Forward-looking statements also include any other statements that do not refer to historical facts. All such forward-looking statements are made pursuant to the "safe-harbour" provisions of applicable Canadian securities laws. By their very nature, forwardlooking statements are based on expectations and hypotheses and also involve risks and uncertainties, known and unknown, many of which are beyond DiagnoCure's control. Forward-looking statements are presented for the purpose of assisting investors and others in understanding certain key elements of the Corporation's current objectives, strategic priorities, expectations and plans, and in obtaining a better understanding of the Corporation's business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes and that they should not place undue reliance on these forwardlooking statements. For instance, any forward-looking statements regarding the outcome of research and development projects, clinical studies and future revenues, including those related to Previstage(R) GCC and the Corporation's PCP multi-marker prostate cancer test, are based on management expectations and such outcome may vary materially depending on global political and economic conditions, dependence on collaboration partners, uncertainty of healthcare reimbursement, and marketing and distribution challenges. In addition, the reader is referred to the applicable general risks and uncertainties described in DiagnoCure's most recent Annual Information Form under the heading "Risk Factors". DiagnoCure undertakes no obligation to publicly update or revise any forwardlooking statements contained herein unless required by the applicable securities laws and regulations.
SOURCE DiagnoCure inc.
