Spectral Diagnostics Inc. has announced its unaudited financial results for the first quarter ended March 31, 2013.
First Quarter Highlights:
• Continued enrolling patients into the Company's Phase III EUPHRATES trial at a per site rate that is higher than previous sepsis trials. Directed by the Company's Endotoxin Activity Assay (EAA™), which is the only FDA-cleared diagnostic for the risk of developing sepsis, Spectral's EUPHRATES trial is currently targeted to enroll 306 evaluable patients at up to 60 sites in North America. Contingent on maintaining current enrolment rates and timely site start ups, the trial should be fully enrolled by the end of 2014. As of May 14, 2013, 116 patients have been randomized into Spectral's EUPHRATES trial.
• Announced that the first interim analysis has been conducted on the initial 76 randomized patients in its EUPHRATES trial. The Data and Safety Monitoring Board (DSMB), consisting of experts in the fields of critical care medicine, infectious disease, nephrology, biostatistics and regulatory affairs, reviewed the totality of the data set for evidence of safety concerns, such as adverse events and/or adverse device effects, related to the use of the Toraymyxin cartridge. The results from the first interim safety analysis by the DSMB state that there are no safety issues to date concerning the application of the Toraymyxin cartridge to patients in the EUPHRATES trial. In addition, the results state that the EUPHRATES clinical protocol appears to be defining the correct target patient population for this study.
• Concluded the reporting period with approximately $7,576,000 in cash, cash equivalents and short-term investments. Subsequent to quarter end, the Company announced it closed a private placement for gross proceeds of $5.6 million. Under the terms of the private placement, Spectral issued 16,666,667 common shares in the capital of the Company to Toray Industries Inc. at a price of $0.30 per common share, for gross proceeds of $5,000,000. Other investors subscribed for an additional $600,000 under the same terms, bringing the total private placement gross proceeds to $5,600,000. The net proceeds of the private placement will be used to continue to support the Company's EUPHRATES clinical trial and for general operating purposes. Toray's investment represents approximately 12.8% of the issued and outstanding common shares of Spectral, calculated on a non-diluted basis.
• Subsequent to quarter end, the Company announced the appointment of Dr. Gualtiero Guadagni as the Company's Vice President, Sales and Marketing. Dr. Guadagni will primarily be responsible for the development and expansion of commercial opportunities for Toraymyxin and Spectral's Endotoxin Activity Assay (EAA™) in Canada, the United States and Europe.
"During the past few months, we solidified our cash position and strengthened our existing collaborative relationship with Toray Industries," said Dr. Paul Walker, President and CEO of Spectral Diagnostics.
Dr. Walker continued, "On the clinical front, we continued to steadily enroll patients into our pivotal Phase III trial and are now less than a year away from our second planned interim analysis of the trial data."
The second interim analysis will occur after 184 randomized patients have been followed for 28 days. At the second analysis, the trial's DSMB will advise Spectral on the trial's safety, efficacy or futility, with stopping rules in place for efficacy and futility.
A sample size recalculation will be done if necessary. Management remains on track to disclose information from the second interim analysis in the first half of 2014.
Revenue for the three months ended March 31, 2013 was $708,000 compared to $676,000 for the same period in the preceding year, representing an increase of 4.7%.
Revenue was positively impacted by the revised terms of certain EAA™ distribution agreements that took effect during 2012. It is anticipated that revenue in 2013 will be consistent with levels achieved in 2012.
Operating costs for the three months ended March 31, 2013 were $2,807,000 compared to $2,976,000 in the first quarter of 2012. This represents a decrease of $169,000. The Company continues to maintain a low-cost operating structure and expects no material increase in non-clinical operating costs in 2013.
The Company concluded the first quarter of 2013 with cash, cash equivalents and short-term investment of $7,576,000 compared to $10,562,000 as at December 31, 2012.
On April 2, 2013, the Company closed a private placement for gross proceeds of $5.6 million. The cash balance immediately following the private placement was $12,955,000.