PreMD Reports Second Quarter 2007 Results
"Last Fall we outlined several significant company milestones that wewanted to achieve during 2007. We are pleased with the progress we have madeto date, especially with the recent announcements regarding our agreement withAstraZeneca, our submission to the FDA for an expanded regulatory claim forPREVU(x) POC, and our recent acceptance of our PASA abstract by the AmericanHeart Association," said Brent Norton, president and chief executive officerof PreMD. "Signing an agreement with AstraZeneca for the marketing anddistribution of PREVU(x) in the U.S. is an important milestone and we areconfident that they are the right partner for the product. It is anticipatedthat PREVU(x) will be partnered for distribution within other territories in2007 as well. Our business development efforts are also focused on otherproducts in our pipeline, specifically seeking potential partnerships for ourPREVU(x) LT test to the life-insurance industry and our line of oncologyproducts. In the interim, we anticipate hearing from the FDA regarding our 510(k) application for PREVU(x) POC, which will strengthen the value ofPREVU(x)."
"In signing a manufacturing and supply agreement with Fisher Diagnostics,we believe that their expertise could greatly benefit our strategic productinitiatives. Through extensive industry research, we determined that they werebest suited to address PreMD's impending growing supply chain needs, driven byour recent partnership with AstraZeneca and anticipated partnerships withother organizations. Also, Fisher Diagnostics is a leading organization thatcurrently supplies several of the world's leading medical companies."
Dr. Norton continued, "As we look to continually expand our productplatform, our newly allowed patents provide broad protection to our colorectalcancer screening portfolio and enhance the value of the company's intellectualproperty. We continue to initiate and execute clinical trials in our targetedareas, thereby building a strong foundation for our future in predictivemedicine. We look forward to reporting the achievement of additionalmilestones during the remainder of 2007."
The consolidated net loss for the three months ended Q2 2007 was$1,341,000 or $(0.05) per share compared with a loss of $2,115,000 or $(0.10)per share for the quarter ended Q2 2006, primarily due to a decrease inclinical trial expenses and unrealized foreign exchange gains on therevaluation of the convertible debentures.
Total product sales were $8,000 for Q2 2007 compared with $5,000 for Q22006. License revenue was nil for Q2 2007, compared to $80,000 for Q2 2006.
During Q2 2007, the Company focused on managing the cancer clinical trialprogram and on preparing the submission to the FDA requesting an expandedclaim for PREVU(x) POC. Most of the skin cholesterol clinical trials werecompleted at the end of 2006. As a result, research and developmentexpenditures for the quarter decreased by $739,000 to $731,000 from $1,470,000in Q2 2006. The variance for the period reflects:
General and administration expenses amounted to $911,000 for Q2 2007compared with $689,000 in Q2 2006, an increase of $222,000. The increase forthe quarter includes:
Interest on convertible debentures (issued on August 30, 2005) amounted to$165,000 in Q2 2007 compared with $173,000 in Q2 2006. The debentures bearinterest at an annual rate of 7%, payable quarterly in either cash or stock.Imputed interest of $255,000 and $173,000 in Q2 2007 and 2006 respectively,represents the expense related to the accretion of the liability component, atan effective interest rate of 14.8% (12.75% in 2006), effective Janua
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