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"We are very pleased with the progress we have made during the thirdquarter of fiscal 2007 through the implementation of our strategy anddevelopment initiatives," said Dr. Brent Norton, president and CEO of PreMDInc. "We continue to work with AstraZeneca regarding the planned marketing anddistribution of our skin cholesterol product in the United States and areactively negotiating alliances with other organizations in different marketsfor our products. We are currently pursuing commercialization opportunitiesfor PREVU(x)LT in the life insurance industry, which has garnered interest inCanada, the United States and Europe. In addition, we have exciting newprospects in the cosmetics field which expands the potential of our skincholesterol franchise. This opportunity is currently in negotiations with aleading cosmetics company."
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Dr. Norton continued "We have also made advancements with the US Food andDrug Administration (FDA) regarding our expanded regulatory claim on our skincholesterol test. We are actively working with the agency to ensure allprocesses are precisely met and have submitted detailed answers to thequestions asked. We anticipate hearing a response, which could be in the formof additional questions, in the coming weeks. On the clinical front, we arevery excited by the recent data from our PASA study, which is included withour submission to the FDA. The data was recently presented at the AHAconference and is scheduled for publication in April 2008 in the AmericanJournal of Cardiology. We also had further clinical validation with our cancerportfolio, with our breast cancer data being accepted for presentation at theSan Antonio Breast Cancer Symposium."
"Going forward, we anticipate building near-term revenues through theseexciting new partnership opportunities and sales, royalty and milestonepayments from our skin cholesterol product. PreMD remains deeply committed tothe belief that winning the battle against diseases such as cardiovascular andcancer can be prevented if taken the necessary precautionary steps. Ouroperations and research and development program continues to support thatcommitment to predictive medicine technology, especially as we explore otheravenues to make our innovative products available."
Financial Review
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The consolidated net loss for the three months ended September 30, 2007(Q3 2007) was $1,635,000 or $(0.07) per share compared with a loss of$1,120,000 or $(0.05) per share for the quarter ended Q3 2006.
Total product sales were $7,000 for Q3 2007 compared with $1,000 for Q32006. License revenue was $27,000 Q3 2007, compared to $577,000 for Q3 2007.
During Q3 2007, the Company focused on managing the cancer clinical trialprogram and on validation of the contract manufacturing for the PREVU(x)system. Most of the skin cholesterol clinical trials were completed at the endof 2006. As a result, research and development expenditures for the quarterdecreased by $104,000 to $737,000 from $841,000 in Q3 2006. The variance forthe period reflects:
General and administration expenses amounted to $995,000 for Q3 2007compared with $499,000 in Q3 2006, an increase of $496,000. The increase forthe quarter includes:
Interest on convertible debentures (issued on August 30, 2005) amounted to$167,000 in Q3 2007 compared with $172,000 in Q3 2006. The debentures bearinterest at an annual rate of 7%, payable quarterly in either cash or stock.Imputed interest of $253,000 and $204,000 in Q3 2007 and 2006 respectively,represent the expense related to the accretion of the liability component, atan effective interest rate of 14.8%. Effective January 1, 2007, amortiz
