Spectral Medical Inc. (“Spectral” or the “Company”) (TSX:
EDT), a late stage theranostic company advancing
therapeutic options for sepsis and septic shock, as well as
commercializing a new proprietary platform targeting the renal
replacement therapy market through its wholly-owned subsidiary
Dialco Medical Inc.
(“Dialco”), today announced
its financial results for the first quarter ended March 31, 2022
and provided a corporate update.
Chris Seto, CEO of Spectral Medical, commented,
“We are pleased to report continued progress on our Tigris trial.
Specifically, enrollment activity ramped up following our February
investigator meeting along with the recent protocol amendment
acceptance by the FDA allowing for the use of SOFA scoring as
inclusion criteria into the study. We have now randomized a total
of 34 patients out of the 150 total patients to be enrolled.
Additionally, we believe the launch of the EDEN sub-study will
provide another tool to support enrollment, as these patients will
be considered for the Tigris study. We remain encouraged by the
early results from the Tigris trial, as the mortality outcome data
to date has been ahead of expectations. Moreover, we continue to
target completion of the Tigris trial enrollment in mid-2023.”
Dr. John Kellum, Chief Medical Officer of
Spectral, further noted, “We continue to advance the development
and commercialization of our SAMI and DIMI devices through our
Dialco Medical subsidiary. We remain focused on the start of our
DIMI usability trial for home use and we expect first patient
enrollment in the third quarter of 2022 with a study duration of
approximately 18 months. We appreciate the support of our potential
clinical site trial partners who have been working hard to address
staffing shortages across the dialysis clinic industry. With the
FDA approved protocol amendment to the DIMI home hemodialysis study
that simplifies the protocol and allows for extended use for
patients, we are now progressing to the site contracting phase.
Financial ReviewRevenue for the
three-months ended March 31, 2022 was $484,000 compared to $746,000
for the same three month period last year. The majority of the
decrease is due to the timing of orders for products.
Operating costs for the quarter ended March 31,
2022, were $3,172,000 compared to $2,391,000 for the corresponding
period in 2021, representing an increase of $781,000.
An increase of $533,000 over the same period in
the prior year related to salaries and benefits. In 2021, the
Company received funds from the Canada Emergency Wage Subsidy
program for $250,000. This program expired at the end of 2021 and
there were no additional funds received in 2022. In addition, the
Company expanded its sales/technical specialists in the U.S., in
the second quarter of 2021, which resulted in an expense of
$157,000 in the first quarter of 2022 compared to the first quarter
of 2021, where there was no expense. In addition, the increase
reflects a full quarters expense for the Chief Medical Officer,
hired on March 1, 2021 in the prior year. Consulting and
professional fees also increased $134,000 in the first quarter of
2022 compared to the same period a year ago due to increased
clinical activity as well as DIMI product development fees.
While the Company continues to maintain a low
cost operating structure for its base business operations, it
anticipates its operating costs to increase throughout 2022 as
Spectral’s Tigris trial enrolment is expected to increase
significantly, combined with incremental costs associated with
Dialco’s upcoming usability trial for DIMI and the increase in
field resources for the marketing and commercialization activities
of its RRT devices.
Loss for the quarter ended March 31, 2022 was
$2,688,000 ($0.010 per share) compared a loss of $1,645,000 ($0.007
per share) for the same quarter last year.
The Company concluded the first quarter of 2022
with cash of $6,472,000 compared to $8,890,000 cash on hand as of
December 31, 2021.
The total number of common shares outstanding
for the Company was 268,146,781 as at March 31, 2022.
Corporate Highlights During &
Subsequent to First Quarter Ended March 31, 2022
Tigris Trial and Regulatory
Program
- Patient EnrollmentTotal of 34 patients
randomized to-date out of the 150 total to be enrolled in Tigris,
with preliminary mortality outcome data continuing to exceed
expectations. Of the seven patients enrolled in 2022, four were
enrolled as a result of the recent FDA approved protocol amendment
allowing for the use of SOFA scoring as inclusion criteria into the
study.An investigator meeting was held in February 2022. This
meeting along with the recent protocol amendment acceptance by the
FDA has resulted in trial sites responding by reporting renewed
patient screening activities – leading to increased enrollment
activity in April, with four patients randomized.
- Tigris SitesThere are currently 14 Tigris
sites onboarded. One site was recently closed out of the Tigris
study, as the clinical team concluded there was no path to
rehabilitating productive performance at this site. The Company is
taking steps to provide maximum potential from fifteen active
sites, from a screening and enrolling perspective. The clinical
team is continuing to consider additional clinical trial sites to
allow for the replacement of low performing sites, and is in the
final steps of opening West Virginia University for
enrollment.
- TimingThe Company continues to focus on
finalizing the Tigris trial within the reasonably shortest
timelines. Assuming there is no significant recurrence of COVID-19
cases in the Tigris site ICUs, the Company continues to target
interim enrollment in Q4 2022, and finalizing its Tigris trial
enrollment in mid-2023.
- EDEN
observational studyIn March 2022, the Company launched an
ancillary observational study, EDEN, to collect data on patients
with sepsis even if ineligible for Tigris. EDEN will capture much
needed data on the full range of septic shock and its relation to
organ failure and endotoxin activity. These data will inform
subsequent discussions with the FDA on labelling for PMX as well as
to provide the medical community and the Company a better picture
of the addressable population in the U.S. for PMX. Furthermore,
patients enrolled in EDEN will also be considered for entry into
the Tigris study, which provides another tool to support
enrollment.The Company has onboarded four EDEN sites and enrolled
seven patients into the observational study.
-
Commercialization Pre-Launch ActivityOur
relationship with our exclusive distribution partner for PMX in
North America continues to strengthen, as our joint committee
meetings have advanced further than simply monitoring progress on
the Tigris Trial. Our exclusive distribution partner remains
committed with a tactical focus on the development of the North
American launch of PMX, along with the already commercialized
companion diagnostic EAA. These pre-launch activities include
developing a broad campaign to bring endotoxins to the forefront
and more broadly explain their role as it relates to the pathology
of certain septic shock.
Dialco
- DIMI
Usability TrialThe Dialco team is focused on the DIMI
usability trial to obtain FDA clearance for in home use, and
expects first patient enrollment in Q3 2022 with study duration of
approximately 18 months. The timing of the start of the DIMI
usability trial for home hemodialysis has also been impacted by the
COVID pandemic. Dialysis clinics are experiencing severe staffing
shortages as they work to accommodate current patients as well as
respond to an increase in patients with COVID related kidney injury
requiring dialysis. On January 31, 2022, the FDA approved an
amendment to the DIMI home hemodialysis study that simplifies the
protocol and allows for extended use for patients. Management
believes that the revised protocol increases study feasibility and
should improve enrollment.
- Medical Advisory
BoardDialco formed a Medical Advisory Board comprised of
leading home hemodialysis experts, with significant experience in
clinical research, patient care and patient-centered outcomes
related to dialysis in the home. The medical advisory board’s focus
will be to support in guiding the DIMI usability trial and
continued clinical development of the DIMI device.
- DIMI
CommercializationManagement believes the 35-patient
usability trial represents a prime commercialization opportunity to
demonstrate positive real-world experience and the versatility of
DIMI amongst Dialco’s clinical trial partners, who are also
potential DIMI customers. In order to support commercial expansion,
and in anticipation to the start-up of the DIMI usability trial,
Dialco is expanding its field force for sales training and
technical support. Dialco currently has field representatives in
Ontario, as well as Pennsylvania, Florida and Michigan, with
recruitment initiatives underway for further expansion.
- SAMI
CommercializationSAMI continues to be launched in Canada
and the U.S. with successful clinical evaluations ongoing in key
hemodialysis centres, as well as expansion of the commercial sales
pipeline. As hospitals are experiencing a significant shortage of
CRRT machines in COVID-19 affected ICUs, there has been increased
activity with respect to the use of SAMI in the treatment of
COVID-19 positive patients. The Company has successfully developed
remote installation, and set-up on-line training for SAMI. The
Company expects to continue to generate revenue in 2022 pursuant to
its existing commercial arrangements for SAMI machines and
disposables.
Addition to Spectral Senior Leadership
Team
On March 21, 2022, the Company announced the
appointment of Blair McInnis as CFO. He is responsible for
overseeing the financial management of the Company, including
finance, accounting, treasury, business planning and investor
relations. Mr. McInnis has over fifteen years of corporate finance
and reporting experience, most recently as Vice President of
Finance at SMTC Corporation, a Nasdaq-listed issuer prior to being
taken private by HIG in 2021.
U.S. Listing Update
Management and the Board believe a senior U.S.
listing aligns with the goals of the business and its stakeholders,
and the Company continues to prepare for a potential listing on a
senior U.S. exchange.
About Spectral
Spectral is a Phase 3 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 is approved for therapeutic use in Japan and
Europe, and has been used safely and effectively on more than
340,000 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., is also commercializing a new set of
proprietary platforms addressing renal replacement therapy
(RRT) across the dialysis spectrum. SAMI is
targeting the acute RRT market, while DIMI is targeting the chronic
RRT market. Dialco is currently pursuing regulatory approval for
U.S. in-home use of DIMI, which is based on the same RRT platform
as SAMI, but will be intended for home hemodialysis use. DIMI
recently received its FDA 510k clearance for use in hospital and
clinical settings, and obtained its Health Canada license for use
within Canadian hospitals, clinics and in home.
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.
For further information, please contact:
Blair McInnis |
Ali Mahdavi |
David Waldman/Natalya Rudman |
CFO |
Capital Markets & Investor Relations |
US Investor Relations |
Spectral Medical Inc. |
Spinnaker Capital Markets Inc. |
Crescendo Communications, LLC |
416-626-3233 |
416-962-3300 |
212-671-1020 |
bmcinnis@spectraldx.com |
am@spinnakercmi.com |
edt@crescendo-ir.com |
|
|
|
Spectral Medical Inc.Condensed
Interim Consolidated Statements of Financial PositionIn CAD
(000s)
|
|
March 31,2022 |
December 31,2021 |
|
|
$ |
$ |
|
|
|
|
Assets |
|
|
|
Current assets |
|
|
|
Cash |
|
6,472 |
8,890 |
Trade and other receivables |
|
286 |
205 |
Inventories |
|
519 |
293 |
Prepayments and other assets |
|
1,137 |
875 |
|
|
8,414 |
10,263 |
Non-current assets |
|
|
|
Right-of-use-asset |
|
508 |
532 |
Property and equipment |
|
489 |
532 |
Intangible asset |
|
224 |
228 |
Total assets |
|
9,635 |
11,555 |
|
|
|
|
Liabilities |
|
|
|
Current liabilities |
|
|
|
Trade and other payables |
|
1,670 |
1,522 |
Current portion of contract liabilities |
|
742 |
689 |
Current portion of lease liability |
|
93 |
92 |
|
|
2,505 |
2,303 |
Non-current liability |
|
|
|
Lease liability |
|
467 |
490 |
Non-current portion of contract liabilities |
|
4,512 |
4,679 |
Total liabilities |
|
7,484 |
7,472 |
|
|
|
|
Shareholders’ equity |
|
|
|
Share capital |
|
84,502 |
84,357 |
Contributed surplus |
|
7,985 |
7,985 |
Share-based compensation |
|
8,595 |
7,984 |
Warrants |
|
2,251 |
2,251 |
Deficit |
|
(101,182) |
(98,494) |
Total shareholders’ equity |
|
2,151 |
4,083 |
Total liabilities and shareholders’ equity |
|
9,635 |
11,555 |
Spectral Medical Inc.Condensed Interim
Consolidated Statements of Loss and Comprehensive LossIn
CAD (000s), except for share and per share
data(Unaudited)
|
|
Three-monthsended March
31,2022 |
Three-monthsended March
31,2021 |
|
|
$ |
$ |
|
|
|
|
Revenue |
|
484 |
746 |
|
|
|
|
Expenses |
|
|
|
Changes in inventories of finished goods and work-in-process |
|
36 |
66 |
Raw materials and consumables used |
|
112 |
75 |
Salaries and benefits |
|
1,793 |
1,260 |
Consulting and professional fees |
|
678 |
544 |
Regulatory and investor relations |
|
180 |
136 |
Travel and entertainment |
|
85 |
26 |
Facilities and communication |
|
90 |
70 |
Insurance |
|
119 |
97 |
Depreciation and amortization |
|
73 |
80 |
Interest expense on lease liability |
|
7 |
7 |
Foreign exchange loss |
|
2 |
41 |
Other (income) expense |
|
(3) |
24 |
Gain on disposal of property and equipment |
|
- |
(35) |
|
|
3,172 |
2,391 |
|
|
|
|
Loss and comprehensive loss for the period |
|
(2,688) |
(1,645) |
|
|
|
|
Basic and diluted loss per common share |
|
(0.010) |
(0.007) |
Weighted average number of common shares outstanding –
basic and diluted |
|
267,980,359 |
237,067,764 |
Spectral Medical Inc.Condensed Interim
Consolidated Statements of Changes in Shareholders’
EquityIn CAD (000s)(Unaudited)
|
|
Number ofshares |
ShareCapital |
Contributedsurplus |
Share-basedcompensation |
Warrants |
Deficit |
TotalShareholders’equity |
|
|
|
$ |
$ |
$ |
$ |
$ |
$ |
Balance, January 1, 2021 |
|
236,755,745 |
71,870 |
7,981 |
6,771 |
2,418 |
(89,709) |
(669) |
Warrants exercised |
|
3,194,732 |
2,135 |
- |
- |
(697) |
- |
1,438 |
Loss and comprehensive loss for the period |
|
- |
- |
- |
- |
- |
(1,645) |
(1,645) |
Share-based compensation |
|
- |
- |
- |
648 |
- |
- |
520 |
Balance, March 31, 2021 |
|
239,950,477 |
74,005 |
7,981 |
7,419 |
1,721 |
(91,354) |
(228) |
Bought deal offering |
|
23,530,000 |
7,406 |
- |
- |
1,464 |
- |
8,870 |
Share options exercised |
|
143,333 |
98 |
- |
(46) |
- |
- |
52 |
Warrants exercised |
|
4,262,598 |
2,848 |
- |
- |
(930) |
- |
1,918 |
Warrants expired |
|
- |
- |
4 |
- |
(4) |
- |
- |
Loss and comprehensive loss for the period |
|
- |
- |
- |
- |
- |
(7,140) |
(7,140) |
Share-based compensation |
|
- |
- |
- |
611 |
- |
- |
611 |
Balance, December 31, 2021 |
|
267,886,408 |
84,357 |
7,985 |
7,984 |
2,251 |
(98,494) |
4,083 |
Balance, January 1, 2022 |
|
267,886,408 |
84,357 |
7,985 |
7,984 |
2,251 |
(98,494) |
4,083 |
Share options exercised |
|
211,335 |
114 |
- |
(51) |
- |
- |
63 |
RSUs released |
|
49,038 |
31 |
- |
(31) |
- |
- |
- |
Loss and comprehensive loss for the period |
|
- |
- |
- |
- |
- |
(2,688) |
(2,688) |
Share-based compensation |
|
- |
- |
- |
693 |
- |
- |
693 |
Balance, March 31, 2022 |
|
268,146,781 |
84,502 |
7,985 |
8,595 |
2,251 |
(101,182) |
2,151 |
Spectral Medical Inc.Condensed Interim
Consolidated Statements of Cash FlowsIn CAD
(000s)(Unaudited)
|
|
Three-monthsended March 31,2022 |
Three-monthsended March 31,2021 |
|
|
$ |
$ |
Cash flow provided by (used in) |
|
|
|
|
|
|
|
Operating activities |
|
|
|
Loss and comprehensive loss for the period |
|
(2,688) |
(1,645) |
Adjustments for: |
|
|
|
Depreciation on right-of-use asset |
|
24 |
23 |
Depreciation on property and equipment |
|
45 |
53 |
Amortization of intangible asset |
|
4 |
4 |
Interest expense on lease liability |
|
7 |
7 |
Unrealized foreign exchange loss on cash |
|
6 |
52 |
Share-based compensation |
|
693 |
648 |
Gain on disposal of property and equipment |
|
- |
(35) |
Changes in items of working capital: |
|
|
|
Trade and other receivables |
|
(81) |
(460) |
Inventories |
|
(226) |
(19) |
Prepayments and other assets |
|
(262) |
(279) |
Trade and other payables |
|
148 |
(22) |
Contract liabilities |
|
(114) |
(172) |
Net cash used in operating activities |
|
(2,444) |
(1,845) |
|
|
|
|
Investing activities |
|
|
|
Proceeds on disposal of property and equipment |
|
- |
72 |
Property and equipment acquisitions |
|
(2) |
(189) |
Net cash used in investing activities |
|
(2) |
(117) |
|
|
|
|
Financing activities |
|
|
|
Lease liability payments |
|
(29) |
(28) |
Share options exercised |
|
63 |
- |
Warrants exercised |
|
- |
1,438 |
Net cash provided by financing activities |
|
34 |
1,410 |
|
|
|
|
Decrease in cash |
|
(2,412) |
(552) |
Effects of exchange rate changes on cash |
|
(6) |
(52) |
Cash, beginning of period |
|
8,890 |
5,807 |
Cash, end of period |
|
6,472 |
5,203 |
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