SQI Diagnostics Reports Third Quarter Financial Results
SQI Diagnostics Reports Third Quarter Financial Results
Significant Progress on delivering Proof-of-Concept Assays for Large Pharma
TORONTO--(BUSINESS WIRE)-- SQI Diagnostics Inc. (TSX-V: SQD), a life sciences and diagnostics company that develops and commercializes proprietary technologies and products for advanced microarray diagnostics, today announced its financial and operational results for the third quarter-ended June 30, 2013.
Highlights of Commercial Progress
- During the quarter the company executed two master services agreements with two global Pharma companies to develop proof-of-concept immunogenicity assays in its Diagnostics Tools and Services business. These global Pharma projects allow SQI to leverage its existing IVD technology and existing platforms to address the needs of pharmaceutical companies in the drug testing market. The names of the global pharmaceutical companies have been omitted owing to confidentiality agreements with both of the entities and SQI Diagnostics
- Global Pharma 1: During and subsequent to quarter-end SQI completed commercialization milestones in the development of a proof-of-concept anti-drug-antibody ("ADA") assay to detect and quantify the immune responses to a new class of drugs. The target drug is in the pre-human phase and as such this provides SQI the opportunity to win commercial business at the earliest phases of clinical work and could lead to incorporating SQI's products in all of the subsequent phases of human clinical trials. The multiplex proof-of-concept product, completed August 15, demonstrated one hundred percent agreement in primates and excellent agreement in the other two species when compared to the single-plex tests currently used by Global Pharma 1. Other performance criteria of the tests, including sensitivity, have exceeded project goals. Owing to the achievement of all project milestones, an on-site evaluation of the assay on SQI's SQiD-X system is being planned. Successful demonstration of the proof-of-concept is expected to result in the sale of one or more SQiDlite™ platforms as well as the multiplex Custom PLEX test kits that would be used in the target customer's clinical testing throughout drug development.
- Global Pharma 2 - project 1: SQI completed all development milestones for the previously disclosed proof-of-concept assay in collaboration with Global Pharma 2. This Custom PLEX ADA assay will measure the immune responses in clinical trials to one of the customer's in-development biologic drugs. This 21 biomarker assay takes full advantage of SQI's multiplexing capabilities and has met or exceeded all project goals. The target drug used in this proof-of-concept project is in Global Pharma 2's clinical trials and if adopted commercially, SQI's Custom PLEX ADA product would be used for testing during human clinical trials. The Company expects to deliver Custom PLEX ADA kits in September that will be evaluated for commercial feasibility by Global Pharma 2.
- Global Pharma 2 - project 2: SQI also made significant progress on the commercial demonstration of an 8-plex cytokine assay for Global Pharma 2. SQI Diagnostics completed all project work on the Ig_PLEX Cytokine assay and delivered a SQiD-X platform to the customer's site on August 9, 2013 to enable evaluation of the Ig_PLEX Cytokine assay by the customer. The evaluation is expected to be completed within 30 days. Successful evaluation of the ADA Custom PLEX proof-of-concept and the Ig_PLEX Cytokine assay are expected to result in the sale of test kits and SQiDlite platforms for use in the customer's drug development programs. Cytokine assays are commonly used in clinical trials during the development of many classes of drugs and SQI Diagnostics expects to widely market its cytokine products.
- The positive results of the proof-of-concept assay targeted at immunogenicity testing of heparin in collaboration with Algorithme Pharma were presented at the 14th Annual Immunogenicity for Biotherapeutics Conference in Baltimore held 18-20 March. The Company is participating in on-going marketing efforts with Algorithme Pharma which strategically target commercial opportunities with global pharmaceuticals. Subsequent to quarter-end, SQI delivered a diagnostic system to Algorithme Pharma for further collaborative sales initiatives and in preparation for the marketing webinar titled "A Multiplexed Approach for Immunogenicity Assessment Using the New SQiDlite System: Case Study Analysis" held on July 11.
- During the quarter, the Company continued to execute its validation plan for Ig_PLEX Celiac DGP. The Company expects to complete the validation work required for regulatory submission in calendar 2013 and to file with the FDA and Health Canada shortly thereafter; however, the Company will continue to prioritize projects in favour of those with near-term revenue prospects.
- On May 2, 2013 the Company completed a non-brokered private placement of 5,126,044 units of the Company at $0.75 per unit for gross proceeds of $3,845,000. Each unit consists of one common share and one common share purchase warrant. Each common share purchase warrant entitles the holder to purchase one common share at a price of $1.10 for a period of two years from the date of issuance.
- The Company previously announced that a special committee was established to review strategic alternatives. Subsequent to quarter-end and in light of the recent commercial progress with the Diagnostic Tools and Services offering the Company and its Board of Directors has decided to place the assessment of strategic alternatives on hold and the special committee was disbanded.
"SQI has made significant commercial progress in the quarter having rapidly completed multiple Custom PLEX collaborations, meeting or exceeding our agreed to performance targets," said Andrew Morris, President and CEO of SQI Diagnostics. "We are excited to see the benefits of our platforms and technology being recognized by our Global Pharma collaborators and expect to grow these relationships into successful commercial arrangements."
For the quarter-ended June 30, 2013, the Company recorded a net loss of $1,740,000 ($0.04 net loss per share) compared to a net loss of $1,585,000 ($0.04 net loss per share) for the quarter-ended June 30, 2012. The net loss for the nine months ended June 30, 2013 was $4,654,000 ($0.11 net loss per share) compared to a net loss of $4,584,000 ($0.13 net loss per share) for the nine months ended June 30, 2012.
R&D expenditures, excluding amortization and stock based compensation, for the quarter-ended June 30, 2013 were $895,000 compared to $672,000 for the quarter-ended June 30, 2012. R&D expenditures, excluding amortization and stock based compensation, for the nine months ended June 30, 2013 were $2,228,000 compared to $2,237,000 for the nine months ended June 30, 2012. The R&D expenditures in the three and nine months ended 2013 have been focussed on projects to demonstrate the Company's ability to rapidly develop proof-of-concept assays for our Diagnostic Tools and Services customers in the large Pharma markets as well as the completion of on-going validation of the Celiac DGP assay.
Corporate and general expenses, excluding stock-based compensation, totalled $453,000 and $1,234,000 for the three and nine months ended June 30, 2013, respectively. Corporate and general expenses, excluding stock-based compensation, totalled $528,000 and $1,300,000 for the three and nine months ended June 30, 2012, respectively.
Sales and marketing expenses were primarily related to sales and marketing consultant fees and to travel related to selling activities in the quarter. Sales and marketing expenses, excluding stock based compensation, totalled $88,000 for the three months ended June 30, 2013 compared to $57,000 for the three months ended June 30, 2012. Sales and marketing expenses, excluding stock based compensation, totalled $299,000 for the nine months ended June 30, 2013 compared to $181,000 for the nine months ended June 30, 2012. The increase in sales and marketing expenses for the three and nine months ended June 30, 2013 compared to the three and nine months ended June 30, 2012 was primarily a result of the addition of a senior sales contractor in June of 2012 and increased expenditures on sales travelling, conferences, and marketing materials as the Company focuses on creating and developing sales opportunities for its Diagnostic Tools and Services business.
At June 30, 2013, current assets were $3,178,000 compared to $4,208,000 at September 30, 2012. Working capital as at June 30, 2013 was $2,698,000 compared to $3,190,000 at September 30, 2012.
Detailed financial statements and the MD&A are available at www.sedar.com.
About SQI Diagnostics
SQI Diagnostics is a life sciences and diagnostics company that develops and commercializes proprietary technologies and products for advanced microarray diagnostics. The Company's proprietary microarray tests and fully-automated systems are designed to simplify protein and antibody testing workflow, increase throughput, reduce costs and provide excellent data quality. For more information, please visit www.sqidiagnostics.com.
This press release contains certain forward-looking statements, including, without limitation, statements containing the words "may", "plan", "will", "estimate", "continue", "anticipate", "intend", "expect", "believe", "in the process", "is subject to" and other similar expressions which constitute "forward-looking information" within the meaning of applicable securities laws. Forward-looking statements reflect the Company's current expectation and assumptions, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. These forward-looking statements involve risks and uncertainties including, but not limited to, our need for additional capital to sustain our business, statements with respect to sales of our IgX plex™ products and SQiDworks and other analytical systems, agreements and future agreements to sell our products, the success of our Diagnostic Tools and Services business and our intent to build near-term revenue streams from this business, the completion of our second-generation SQiDlite platform, the build-out of our portfolio of immunoassay tests, the successful regulatory filing and receipt of regulatory approvals for our later stage quantitative diagnostic kits , the acceleration of our revenue ramp, general economic and market segment conditions, competitor activity, technology changes and regulatory approvals. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks and uncertainties and other risks detailed from time-to-time in the Company's ongoing filings with the securities regulatory authorities, which filings can be found at www.sedar.com . Actual results, events, and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements either as a result of new information, future events or otherwise, except as required by applicable securities laws.
This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SQI Diagnostics Inc.
Andrew Morris, 416-674-9500 ext. 229
Chief Executive Officer
KEYWORDS: North America Canada
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