TORONTO, Aug. 14 /PRNewswire-FirstCall/ -- Predictive medicine
company PreMD Inc. (TSX: PMD; Amex: PME) today announced results
for the second quarter of fiscal 2007 ended June 30, 2007 ("Q2
2007"). Recent Significant Highlights - Completed a U.S. marketing
and distribution partnership with AstraZeneca Pharmaceuticals for
PREVU(x). - Submitted a 510(k) application to U.S. Food and Drug
Administration (FDA) for an expanded regulatory claim for PREVU(x)
POC. - Completed a manufacturing and supply agreement with Fisher
Diagnostics (a subsidiary of ThermoFisher Scientific) for the
manufacturing and assembly of PREVU(x) POC test kits and PREVU(x)
LT reagents. - The American Stock Exchange accepted continued
listing plan. - Received Notice of Allowance for a United States
patent on PREVU(x) LT from United States Patent and Trademark
Office (USPTO). - Granted approval by the Canadian Intellectual
Property Office for two patents titled: 'Screening Test for Early
Detection of Colorectal Cancer' and 'Screening Test for Early
Detection of Colorectal Neoplasia.' - Awarded registered trademarks
for the name 'PreMD' as well as the corporate slogan 'Predict to
Prevent' by the Canadian Intellectual Property Office. - Completed
two scientific submissions based on findings from PREPARE and PASA
studies. - Acceptance of PASA abstract for presentation at the
American Heart Association Scientific Sessions 2007. "Last Fall we
outlined several significant company milestones that we wanted to
achieve during 2007. We are pleased with the progress we have made
to date, especially with the recent announcements regarding our
agreement with AstraZeneca, our submission to the FDA for an
expanded regulatory claim for PREVU(x) POC, and our recent
acceptance of our PASA abstract by the American Heart Association,"
said Brent Norton, president and chief executive officer of PreMD.
"Signing an agreement with AstraZeneca for the marketing and
distribution of PREVU(x) in the U.S. is an important milestone and
we are confident that they are the right partner for the product.
It is anticipated that PREVU(x) will be partnered for distribution
within other territories in 2007 as well. Our business development
efforts are also focused on other products in our pipeline,
specifically seeking potential partnerships for our PREVU(x) LT
test to the life-insurance industry and our line of oncology
products. In the interim, we anticipate hearing from the FDA
regarding our 510 (k) application for PREVU(x) POC, which will
strengthen the value of PREVU(x)." "In signing a manufacturing and
supply agreement with Fisher Diagnostics, we believe that their
expertise could greatly benefit our strategic product initiatives.
Through extensive industry research, we determined that they were
best suited to address PreMD's impending growing supply chain
needs, driven by our recent partnership with AstraZeneca and
anticipated partnerships with other organizations. Also, Fisher
Diagnostics is a leading organization that currently supplies
several of the world's leading medical companies." Dr. Norton
continued, "As we look to continually expand our product platform,
our newly allowed patents provide broad protection to our
colorectal cancer screening portfolio and enhance the value of the
company's intellectual property. We continue to initiate and
execute clinical trials in our targeted areas, thereby building a
strong foundation for our future in predictive medicine. We look
forward to reporting the achievement of additional milestones
during the remainder of 2007." Financial Review ----------------
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 in clinical trial expenses and unrealized foreign
exchange gains on the revaluation of the convertible debentures.
Total product sales were $8,000 for Q2 2007 compared with $5,000
for Q2 2006. 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 trial program and on preparing the
submission to the FDA requesting an expanded claim for PREVU(x)
POC. Most of the skin cholesterol clinical trials were completed at
the end of 2006. As a result, research and development expenditures
for the quarter decreased by $739,000 to $731,000 from $1,470,000
in Q2 2006. The variance for the period reflects: - a decrease of
$686,000 in spending on clinical trials for PREVU(x), following the
completion of most of the trials; - a decrease of $152,000 in
spending on the cancer clinical trials; - an increase of $95,000 on
product development in support of manufacturing validation for the
new cordless reader and for general product improvements; and - a
decrease of $15,000 in legal fees on intellectual property. General
and administration expenses amounted to $911,000 for Q2 2007
compared with $689,000 in Q2 2006, an increase of $222,000. The
increase for the quarter includes: - a decrease in stock-based
compensation, a non-cash expense, of $51,000 to $123,000 for Q2
2007 compared with $174,000 for Q2 2006; - an increase of $239,000
in professional fees for legal, audit and consulting related to
business development; and - an increase of $46,000 in expenses
related to investor communications. 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 bear
interest 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, at an effective interest rate of 14.8%
(12.75% in 2006), effective January 1, 2007. Amortization of the
deferred financing fees is included in imputed interest whereas it
was included in amortization expenses in 2006. Amortization
expenses for capital assets and intangible assets for Q2 2007
amounted to $41,000 compared with $110,000 for Q2 2006. The gain on
foreign exchange was $671,000 for Q2 2007, compared with a gain of
$278,000 for Q2 2006. The major contributing factor for the
increase was the impact of foreign exchange rates on the
convertible debentures which are repayable in U.S. dollars.
Interest income amounted to $37,000 for Q2 2007 compared with
$70,000 for Q2 2006 as a result of lower cash balances. Refundable
scientific investment tax credits ("ITCs") accrued for Q2 2007
amounted to $26,000 versus $70,000 for Q2 2006. This decrease was
due to the reduced spending on clinical trials in 2007. Accounts
payable at June 30, 2007 amounted to $352,000 compared with
$964,000 at December 31, 2006. The large decrease resulted from the
payment of expenses related to clinical trials that were completed
near the end of 2006. As at June 30, 2007, PreMD had cash, cash
equivalents and short-term investments totaling $3,539,000
($3,276,000 as at December 31, 2006). The Company invests its funds
in short-term financial instruments and marketable securities. Cash
used to fund operating activities during Q2 2007 amounted to
$1,264,000 compared with $1,835,000 in Q2 2006. To date, the
Company has financed its activities through product sales, license
revenues, the issuance of shares and convertible debentures and the
recovery of investment tax credits (ITCs). Management believes
that, based on our reduced cash expenditures and the current
expectation of further revenues from product sales, royalties and
license revenues, its existing cash resources together with the
proceeds of the private placement on March 27, 2007 and the ITC
receivable of $248,000 will be sufficient to meet its current
operating and capital requirements. About PreMD Inc. PreMD Inc. is
a leader in predictive medicine, dedicated to developing rapid,
non-invasive tests for the early detection of life-threatening
diseases. PreMD's cardiovascular products are branded as PREVU(x)
Skin Cholesterol Test, to be marketed and distributed by
AstraZeneca. The company's cancer tests include ColorectAlert(TM),
LungAlert(TM) and a breast cancer test. PreMD's head office is
located in Toronto, Ontario and its research and product
development facility is at McMaster University in Hamilton,
Ontario. For further information, please visit
http://www.premdinc.com/. For more information about PREVU(x),
please visit http://www.prevu.com/. This press release contains
forward-looking statements. These statements involve known and
unknown risks and uncertainties, which could cause the Company's
actual results to differ materially from those in the
forward-looking statements. Such risks and uncertainties include,
among others, the success of a plan for regaining compliance with
certain continued listing standards of the American Stock Exchange,
successful development or marketing of the Company's products, the
competitiveness of the Company's products if successfully
commercialized, the lack of operating profit and availability of
funds and resources to pursue R&D projects, the successful and
timely completion of clinical studies, product liability, reliance
on third-party manufacturers, the ability of the Company to take
advantage of business opportunities, uncertainties related to the
regulatory process, and general changes in economic conditions. In
addition, while the Company routinely obtains patents for its
products and technology, the protection offered by the Company's
patents and patent applications may be challenged, invalidated or
circumvented by our competitors and there can be no guarantee of
our ability to obtain or maintain patent protection for our
products or product candidates. Investors should consult the
Company's quarterly and annual filings with the Canadian and U.S.
securities commissions for additional information on risks and
uncertainties relating to the forward-looking statements. Investors
are cautioned not to rely on these forward-looking statements.
PreMD is providing this information as of the date of this press
release and does not undertake any obligation to update any
forward-looking statements contained in this press release as a
result of new information, future events or otherwise. (x)Trademark
(Tables Follow) PreMD Inc. Incorporated under the laws of Canada
CONSOLIDATED BALANCE SHEETS (In Canadian dollars) Unaudited As at
As at June 30, December 31, 2007 2006 $ $
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ASSETS Current Cash and cash equivalents 2,515,438 112,577
Short-term investments 1,023,987 3,163,482 Accounts receivable
8,443 11,221 Inventory 178,004 179,219 Prepaid expenses and other
receivables 537,650 570,773 Investment tax credits receivable
248,000 200,000
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Total current assets 4,511,522 4,237,272
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Deferred financing fees, net of accumulated amortization of
$174,863 in 2006 - 347,589 Capital assets, net of accumulated
amortization of $883,699 (2006 - $841,611) 268,589 312,410
Intangible assets, net of accumulated amortization of $953,250
(2006 - $915,027) 344,007 382,229
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5,124,118 5,279,500
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LIABILITIES AND SHAREHOLDERS' DEFICIENCY Current Accounts payable
352,106 963,990 Accrued liabilities 716,590 932,372
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Total current liabilities 1,068,696 1,896,362
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Convertible debentures 5,704,665 6,350,680
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Total liabilities 6,773,361 8,247,042
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Shareholders' deficiency Capital stock 28,883,949 25,263,480
Contributed surplus 2,758,169 2,521,915 Equity component of
convertible debentures 2,239,385 2,239,385 Warrants 1,562,154
1,170,020 Deficit (37,092,900) (34,162,342)
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Total shareholders' deficiency (1,649,243) (2,967,542)
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5,124,118 5,279,500
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PreMD Inc. CONSOLIDATED STATEMENTS OF LOSS, COMPREHENSIVE LOSS AND
DEFICIT (In Canadian dollars) Unaudited Three months ended Six
Months Ended June 30 June 30 -------------------------
------------------------- 2007 2006 2007 2006 $ $ $ $ REVENUE
Product sales 8,250 5,015 26,334 5,132 License revenue - 79,624 -
156,675
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8,250 84,639 26,334 161,807 Cost of product sales 3,720 4,255 8,566
4,383
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Gross Profit 4,530 80,384 17,768 157,424
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EXPENSES Research and development 730,799 1,469,815 1,371,636
2,985,524 General and administration 911,141 688,617 1,552,105
1,265,865 Interest on convertible debentures 165,400 172,623
328,983 338,137 Imputed interest on convertible debentures 231,228
172,720 479,574 404,132 Amortization 41,318 110,110 82,698 154,932
Gain on foreign exchange (670,888) (227,675) (754,441) (215,043)
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1,408,998 2,336,210 3,060,555 4,933,547
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RECOVERIES AND OTHER INCOME Investment tax credits 26,000 70,000
48,000 130,000 Interest 37,105 70,394 64,229 156,929
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63,105 140,394 112,229 286,929
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Net loss for the period (1,341,363) (2,115,432) (2,930,558)
(4,489,194) Deficit, beginning of period (35,751,537) (30,587,133)
(34,162,342) (28,213,371)
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Deficit, end of period (37,092,900) (32,702,565) (37,092,900)
(32,702,565)
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Basic and diluted loss per share $(0.05) $(0.10) $(0.12) $(0.21)
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Weighted average number of common shares outstanding 24,950,579
21,566,994 23,505,688 21,559,121
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PreMD Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In Canadian
dollars) Unaudited Three months ended Six Months Ended June 30 June
30 ------------------------- ------------------------- 2007 2006
2007 2006 $ $ $ $
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OPERATING ACTIVITIES Net loss for the period (1,341,363)
(2,115,432) (2,930,558) (4,489,194) Add items not involving cash
Amortization 41,318 110,110 82,698 154,932 Stock compensation costs
included in: Research and development expense 35,286 58,904 67,383
94,719 General and administration expense 123,312 173,741 180,605
243,212 Gain on sale of capital asset 143 - 143 - Imputed interest
on convertible debentures 231,228 172,720 479,574 404,132 Interest
on convertible debentures paid in common shares 133,967 79,702
270,911 79,702 Deduct gain on foreign exchange (670,888) (277,675)
(754,441) (215,043) Net change in non-cash working capital Balances
related to operations 182,749 44,745 (838,718) 1,296,533 Decrease
in deferred revenue - (81,867) - (158,592)
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Cash used in operating activities (1,264,248) (1,835,052)
(3,442,403) (2,589,599)
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INVESTING ACTIVITIES Short-term investments 291,768 1,695,094
2,109,459 1,881,904 Sale of capital assets 562 - 1,435 - Purchase
of capital assets (484) (2,817) (2,233) (20,915)
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Cash provided by investing activities 291,846 1,692,277 2,108,661
1,860,989
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FINANCING ACTIVITIES Issuance of capital stock, net of issue costs
(49,764) - 3,729,957 -
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Cash provided by financing activities (49,764) - 3,729,957 -
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Effect of exchange rate changes on cash and cash equivalents 3,870
4,145 6,646 46,212
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Net increase (decrease) in cash and cash equivalents during the
period (1,018,296) (138,630) 2,402,861 (682,398) Cash and cash
equivalents - Beginning of period 3,533,734 229,431 112,577 773,199
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- End of period 2,515,438 90,801 2,515,438 90,801
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Represented by Cash 105,372 90,801 105,372 90,801 Cash equivalents
2,410,066 - 2,410,066 -
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2,515,438 90,801 2,515,438 90,801
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DATASOURCE: PreMD Inc. CONTACT: Brent Norton, President and CEO,
Tel: (416) 222-3449 ext. 22, Email: ; Ron Hosking, Vice President
Finance and CFO, Tel: (416) 222-3449 ext. 24, Email: ; Michelle
Rabba, Manager, Corporate Communications, Tel: (416) 222-3449 ext.
25, Email:
Copyright