Spectral Medical Inc. (“Spectral” or the “Company”) (TSX:
EDT), a late-stage theranostic company advancing
therapeutic options for sepsis and septic shock, today announced
its financial results for the first quarter ended March 31, 2023
and provided a corporate update.
During the first quarter the Company implemented
a number of business initiatives, as outlined in Spectral’s
investor update call held on April 6, 2023, that are targeted to
enhance and accelerate Tigris enrollment. Management is pleased to
report positive progress on these initiatives, including:
- enrolled an
additional five patients, three of whom were enrolled at the
University of California San Francisco (“UCSF”), a site that was
onboarded and started actively enrolling in March 2023;
- currently 58
patients enrolled to date and continue to close in on our interim
target of 90 patients, an important milestone as our strategic
commercial partner, Baxter, will have the opportunity to view the
data as well as provide a second milestone payment to
Spectral;
- remain on track
to have 25 active trial sites open by the end of September 2023,
with multiple new sites conducting site initiation visits (“SIV”)
at the Company’s Tigris Investigator Meeting next week;
- new CRO
transition progressing on schedule, with full transition complete
by end of June;
- Tigris
Investigator Meeting set for May 17th and 18th in Charlotte, North
Carolina, including pipeline sites, with more than 20 sites to be
represented; and
- clinician
focused PMX media pre-production progressing well, with production
crew attending and filming at the Tigris Investigator Meeting.
Dr. John Kellum, Chief Medical Officer of
Spectral Medical, stated, “We are witnessing an increase in
enrollment as a result of onboarding additional trial sites, with 3
of the 5 enrollments since April coming from a new site - UCSF.
This is the fastest we’ve seen a new site enroll patients within a
forty-day period. To further assist our efforts, we are conducting
site initiation visits for two additional sites during the second
quarter and expect to have a total of 19 sites onboarded by June.
With the help of our new CRO, Beaufort, who brings a significant
number of clinical field resources, we believe we are on an
accelerated enrollment path, allowing us to more swiftly reach key
enrollment milestones. Importantly, Tigris mortality data continues
to exceed our expectations and has been consistent with our recent
announcement of the EUPHAS-2 study results. The EUPHAS-2 data
further validates our confidence in the outcome of Tigris and our
potential for FDA approval, which would bring a much-needed
personalized therapy to those suffering from endotoxemic septic
shock.”
Chris Seto, Chief Executive Officer of Spectral
Medical, stated, “We are hosting an Investigator Meeting in mid-May
and anticipate very robust attendance, including existing sites,
new and pipeline sites, principal investigators, clinical research
coordinators, our new CRO (Beaufort), our safety committee (ISAC),
and our strategic commercial partner, Baxter. This is a very
important event as we are bringing together key healthcare
professionals for training on how to participate in the clinical
trial, further assisting in the advancement of Tigris. Furthermore,
we are developing educational tools, including videos, to assist in
educating healthcare professionals as well as patients and the
public on endotoxemic septic shock and our PMX therapy. We believe
these materials will aid in supporting commercial adoption of PMX,
assuming FDA approval. We are very proud of our progress and
continue to execute on our strategy. While we are witnessing
initial benefits of our efforts, we believe that we will realize
the full impact of these initiatives over time. We look forward to
reporting our progress as material developments unfold.”
Corporate Highlights During &
Subsequent to the First Quarter Ended March 31, 2023
Tigris
- New Contract Research
Organization (“CRO”)On March 23, 2023, the Company engaged
a new contract research organization (“CRO”), Beaufort. Beaufort
has extensive experience with ICU clinical trials and brings a
strong regulatory group, experienced biostats personnel, and
additional clinical field resources. Transition activities are
progressing well, with full change from the incumbent CRO expected
by the end of the second quarter. As part of its engagement,
Beaufort is reviewing and evaluating recruitment and enrollment
processes on a site-by-site basis of Tigris sites.
- Patient
EnrollmentTotal of 58 patients randomized to date out of
the 150 total patients to be enrolled in the Tigris trial. Patient
screening activities at the sites are increasing and results to
date of those enrolled in the study continue to exceed
expectations. The Company continues to close in on its interim
target of 90 patients, an important milestone.Last twelve-month
enrollment rate has stabilized at 0.182 patients per site per
month. Through the previously announced initiatives to enhance
Tigris enrollment, Management is targeting an enrollment rate of
0.25 patients per site per month.
- Tigris SitesThere
are currently 16 active Tigris sites. The Company remains on
schedule to onboard an additional 9 new sites over the next two
quarters bringing the total sites to 25. Should suitable sites over
and above the 25 be identified, FDA approval would be required to
approve incremental sites. Management believes the FDA would be
amenable to requests for additional Tigris sites, based on
historical interactions.
- TimingThe Company
continues to focus on finalizing the Tigris trial within the
reasonably shortest timelines. The Company targets reaching interim
enrollment of 90 patients around the end of 2023.
- Investigator
MeetingA Tigris study Investigator Meeting (in-person) is
scheduled for May 17th and 18th 2023 in Charlotte, North Carolina.
This represents the first in-person investigator meeting since
August 2019 with agenda set and attendance being confirmed. Robust
attendance is expected with more than 65 key stakeholders of the
Tigris Trial and including pipeline sites more than 20 sites will
be represented. Historically, patient enrollment increases
post-investigator meeting.
- 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 labeling 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 4 EDEN sites and enrolled 51 patients into
the observational study.
EUPHAS-2
On April 6, 2023, the Company reported positive
results from the EUPHAS-2 clinical trial. This study included 50
critically ill Endotoxemic Septic Shock patients assessed with
Spectral’s EAA diagnostic and treatment with PMX. The study
reported a 28-day mortality of just 36% with the treated patients
versus a predicted 75% mortality utilizing the widely accepted SAPS
II mortality estimation tool. This represents more than a 50%
estimated relative mortality reduction with the use of PMX. The
patient population of the EUPHAS-2 study aligns with the patient
population of the Tigris Trial.
PMX Commercialization
- In anticipation
of a positive Tigris trial outcome, the Company has been working
closely with Baxter, the Company’s strategic commercial partner, on
post-approval marketing plans for PMX commercialization. This
includes developing product branding, pricing and roll-out plans
with numerous Baxter departments, including marketing, regulatory,
clinical and reimbursement. Baxter has communicated its intention
to undertake a broad marketing campaign on day 1 of FDA approval
for PMX.
- The Company is
working with Baxter on a sub-study to obtain FDA approval for
hemoperfusion for Baxter’s Prismax device; the Prismax with its
leading installed base, is anticipated to be the primary device
utilized for PMX treatments on commercial launch.
- May 5, 2023,
Baxter announced a new CEO of its proposed Kidney Care business.
For more information, please visit: Baxter Names Chris Toth CEO of
Proposed Kidney Care Spinoff | Baxter
Clinical Team Focused PMX
Media
The Company commissioned a third-party produced
video focused on Endotoxemic Septic Shock (ESS), PMX and positive
patient outcomes. This video will be targeted at a number of Tigris
study stakeholders, including CRCs, trial treatment staff, and
potential patients. The nature of the PMX video will be to inspire
and increase the awareness of the PMX therapy. Management believes
that the video can act as an enrollment catalyst by inspiring
research staff and front line providers, as well as improve
patient/family awareness of ESS and PMX.
Financial Review
Revenue for the three-months ended March 31,
2023 was $530,000 compared to $484,000 for the same three-month
period last year, representing an increase of $46,000, or 9.5%.
This increase was mainly due to an increase in proprietary
biochemicals product revenue.
Operating expenses for the three-months ended
March 31, 2023, were $2,264,000, compared to $2,520,000 for the
same period in the preceding year, a decrease of $256,000, or 10%.
The reduction in operating expenses was primarily due to a
reduction in stock-based compensation due to the issuance timing of
annual grants partially offset by an increase in professional
services, supporting increased Tigris trial activity and salaries
and benefits.
Loss for the three-months ended March 31, 2023
was $1,777,000, or $0.01 per share, compared to a loss of
$2,685,000, or $0.01 per share, for the same quarter last year.
The Company concluded the first quarter of 2023
with cash of $4,886,000 compared to $8,414,000 of cash on hand as
of December 31, 2022.
The total number of common shares outstanding
for the Company was 278,547,804 at March 31, 2023.
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. In July 2022, the U.S. FDA granted
Breakthrough Device Designation for PMX for the treatment of
endotoxemic septic shock. Approximately 330,000 patients are
diagnosed with septic shock in North America each year.
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:
Ali Mahdavi |
David Waldman/Natalya
Rudman |
Blair McInnis |
Capital Markets & Investor
Relations |
US Investor Relations |
CFO |
Spinnaker Capital Markets
Inc. |
Crescendo Communications,
LLC |
Spectral Medical Inc. |
416-962-3300 |
212-671-1020 |
416-626-3233 |
am@spinnakercmi.com |
edt@crescendo-ir.com |
bmcinnis@spectraldx.com |
Spectral Medical Inc.Condensed Interim
Consolidated Statements of Financial PositionIn CAD (000s),
except for share and per share
data(Unaudited)
|
|
|
|
|
|
|
March 31,2023 |
|
December 31, 2022 |
|
|
$ |
|
$ |
|
|
|
|
|
Assets |
|
|
|
|
Current
assets |
|
|
|
|
Cash |
|
4,886 |
|
|
8,414 |
|
Trade and other
receivables |
|
1,104 |
|
|
1,056 |
|
Inventories |
|
349 |
|
|
340 |
|
Prepayments and other
assets |
|
853 |
|
|
276 |
|
|
|
7,192 |
|
|
10,086 |
|
Non-current
assets |
|
|
|
|
Right-of-use-asset |
|
440 |
|
|
464 |
|
Property and equipment |
|
213 |
|
|
237 |
|
Intangible asset |
|
200 |
|
|
211 |
|
Investment in iDialco |
|
913 |
|
|
998 |
|
Total assets |
|
8,958 |
|
|
11,996 |
|
Liabilities |
|
|
|
|
Current
liabilities |
|
|
|
|
Trade and other payables |
|
2,135 |
|
|
3,167 |
|
Current portion of contract
liabilities |
|
669 |
|
|
696 |
|
Current
portion of lease liability |
|
97 |
|
|
96 |
|
|
|
2,901 |
|
|
3,959 |
|
Non-current liability |
|
|
|
|
Lease liability |
|
397 |
|
|
420 |
|
Non-current portion of
contract liabilities |
|
3,844 |
|
|
4,011 |
|
Notes
payable |
|
6,142 |
|
|
6,129 |
|
Total liabilities |
|
13,284 |
|
|
14,519 |
|
|
|
|
|
|
Shareholders’
(deficiency) equity |
|
|
|
|
Share capital |
|
87,050 |
|
|
87,050 |
|
Contributed surplus |
|
8,773 |
|
|
8,773 |
|
Share-based compensation |
|
8,882 |
|
|
8,908 |
|
Warrants |
|
2,490 |
|
|
2,490 |
|
Deficit |
|
(111,521 |
) |
|
(109,744 |
) |
Total shareholders’ deficiency |
|
(4,326 |
) |
|
(2,523 |
) |
|
|
|
|
|
Total liabilities and shareholders’ (deficiency)
equity |
|
8,958 |
|
|
11,996 |
|
Spectral Medical Inc.Condensed Interim
Consolidated Statements of Loss and Comprehensive Loss In
CAD (000s), except for share and per share
data(Unaudited)
|
|
|
|
|
|
|
Three-months Ended March
31, 2023 |
|
Three-months endedMarch
31,2022 |
|
|
$ |
|
$ |
|
|
|
|
|
Revenue |
|
530 |
|
484 |
|
|
|
|
|
Expenses |
|
|
|
|
Changes in inventories of finished goods and work-in-process |
|
- |
|
|
(36 |
) |
Raw materials and consumables
used |
|
137 |
|
|
181 |
|
Salaries and benefits |
|
956 |
|
|
806 |
|
Consulting and professional
fees |
|
628 |
|
|
429 |
|
Regulatory and investor
relations |
|
108 |
|
|
142 |
|
Travel and entertainment |
|
84 |
|
|
55 |
|
Facilities and
communication |
|
82 |
|
|
67 |
|
Insurance |
|
87 |
|
|
119 |
|
Depreciation and
amortization |
|
61 |
|
|
59 |
|
Interest expense |
|
128 |
|
|
7 |
|
Foreign exchange (gain)
loss |
|
(61 |
) |
|
4 |
|
Share-based compensation |
|
(26 |
) |
|
693 |
|
Other income/expense |
|
(5 |
) |
|
(6 |
) |
Net loss on joint
arrangement |
|
85 |
|
|
- |
|
|
|
2,264 |
|
|
2,520 |
|
|
|
|
|
|
Loss and comprehensive loss for the year from continuing
operations |
|
(1,734 |
) |
|
(2,036 |
) |
Loss from discontinued operations |
|
(43 |
) |
|
(649 |
) |
Loss and comprehensive loss for the year |
|
(1,777 |
) |
|
(2,685 |
) |
Basic and diluted loss from continuing operations per
common share |
|
(0.01 |
) |
|
(0.01 |
) |
Basic and diluted loss
from discontinued operations per common share |
|
(0.00 |
) |
|
(0.00 |
) |
Basic and diluted loss
per common share |
|
(0.01 |
) |
|
(0.01 |
) |
|
|
|
|
|
Weighted
average number of common shares outstanding –
basic and diluted |
|
|
|
|
278,547,804 |
|
267,980,359 |
|
Spectral Medical Inc.Condensed Interim
Consolidated Statements of Changes in Shareholders’
EquityIn CAD (000s)(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares |
ShareCapital |
Contributed surplus |
Share-based compensation |
Warrants |
Deficit |
|
Total Shareholders’ (deficiency) equity |
|
|
|
|
$ |
$ |
$ |
$ |
$ |
|
$ |
|
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 |
|
RSU released |
|
49,038 |
31 |
- |
(31 |
) |
|
- |
|
- |
|
Loss and comprehensive
loss for the year |
|
- |
- |
- |
- |
|
- |
(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 |
|
|
Notes |
Number of Shares |
Share Capital |
Contributed surplus |
Share-based compensation |
Warrants |
Deficit |
Total Shareholders’ (deficiency) equity |
|
|
|
$ |
$ |
$ |
$ |
$ |
$ |
Balance January 1, 2023 |
|
278,547,744 |
87,050 |
8,773 |
8,908 |
2,490 |
(109,744 |
) |
(2,523 |
) |
Loss and comprehensive loss for the year |
|
- |
- |
|
- |
- |
|
- |
(1,777 |
) |
(1,777 |
) |
Share-based compensation |
|
- |
- |
|
- |
(26) |
|
- |
- |
(26 |
) |
Balance, March 31, 2023 |
|
278,547,744 |
87,050 |
8,773 |
|
8,882 |
2,490 |
|
(111,521 |
) |
(4,326) |
Spectral Medical Inc.Condensed Interim
Consolidated Statements of Cash FlowsIn CAD
(000s)(Unaudited)
|
|
|
|
|
Three-months ended March 31, 2023 |
|
Three-months ended March 31, 2022 |
|
$ |
|
$ |
Cash flow provided by (used in) |
|
|
|
|
|
|
|
Operating
activities |
|
|
|
Loss for the year |
(1,777 |
) |
|
(2,688 |
) |
Adjustments
for: |
|
|
|
Depreciation on right-of-use asset |
24 |
|
|
24 |
|
Depreciation on property and equipment |
24 |
|
|
45 |
|
Amortization of intangible asset |
11 |
|
|
4 |
|
Amortization of deferred financing fees |
44 |
|
|
|
Interest expense |
129 |
|
|
7 |
|
Unrealized foreign exchange loss (gain) |
(31 |
) |
|
6 |
|
Share-based (reversal) compensation |
(26 |
) |
|
693 |
|
Loss on investment in iDialco |
85 |
|
|
- |
|
Changes in items of
working capital: |
|
|
|
Trade and other receivables |
(48 |
) |
|
(81 |
) |
Inventories |
(9 |
) |
|
(226 |
) |
Prepayments and other assets |
(577 |
) |
|
(262 |
) |
Trade and other payables |
(1,150 |
) |
|
148 |
|
Contract liabilities |
(194 |
) |
|
(114 |
) |
Net cash used in operating activities |
(3,495 |
) |
|
(2,444 |
) |
|
|
|
|
Investing
activities |
|
|
|
Purchases of property and
equipment |
- |
|
|
(2 |
) |
Net cash used in investing activities |
- |
|
|
(2 |
) |
|
|
|
|
Financing
activities |
|
|
|
Lease liability payments |
(33 |
) |
|
(29 |
) |
Share options exercised |
- |
|
|
63 |
|
Net cash provided by financing activities |
(33 |
) |
|
34 |
|
|
|
|
|
Increase (decrease) in
cash |
(3,528 |
) |
|
(2,410 |
) |
Effects of exchange
rate changes on cash |
- |
|
|
(6 |
) |
Cash, beginning of year |
8,414 |
|
|
8,890 |
|
Cash, end of year |
4,886 |
|
|
6,472 |
|
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