Spectral Diagnostics Inc., a Phase III company developing the first theranostic treatment for patients with septic shock, has announced its financial results for the first quarter ended March 31, 2011.
First Quarter Highlights:
• Jointly announced with Medwell Capital Corp., ("Medwell"), (TSX-V:MWC), a non-brokered arrangement whereby Medwell and a consortium of buyers purchased, in private transactions, 12,449,501 common shares and 962,500 common share purchase warrants of Spectral from GrowthWorks Canadian Fund Ltd., representing 15.6% of the issued and outstanding shares. Medwell now owns approximately 45% of the outstanding common shares of Spectral;
• Continued to effectively manage its U.S. pivotal trial for Toraymyxin, a therapeutic hemoperfusion device that removes endotoxin from the bloodstream. The EUPHRATES trial is targeted to enrol approximately 360 patients at 15 sites in the U.S. over a period of 24 to 30 months, with interim results expected at the midpoint of the trial by the end of the first half of 2012;
• Subsequent to quarter end, announced that all 15 carefully chosen clinical sites for the EUPHRATES trial are screening patients and enrolment in the Company's Phase III sepsis trial is underway;
• Concluded the reporting period with $13.6 million in cash and short term investments.
"We continued to execute on all aspects of our unique Phase III clinical trial, the EUPHRATES trial, in the first quarter of this year," said Dr. Paul Walker, President and CEO of Spectral. "In addition, we solidified our investor base during the reporting period. We believe we have laid a strong foundation and look forward to the continued successful implementation of our EUPHRATES trial."
The first quarter ended March 31, 2011 was the Company's first reporting period under International Financial Reporting Standards (IFRS). As anticipated and disclosed in the fourth quarter of 2010, the transition to IFRS had no material impact on Spectral's financial results.
Revenues for the three months ended March 31, 2011 were $622,000 compared to $825,000 for the same period in 2010. Revenues were lower in the first quarter of 2011 compared to the same period in 2010 due primarily to the impact of certain expired distribution contracts which are now in the process of renegotiation.
Operating expenses were consistent year over year, with the exception of employee benefits, which expense category included $126 of stock option expense in the first quarter of 2011 compared to $792 in the same period last year. In addition, management services fees paid to Medwell were $125,000 higher in the quarter as a result of increased management activities in clinical trial oversight and investor relations.
For the three-months ended March 31, 2011, the Company reported a loss of $1,458,000 ($0.02 per share) compared to $1,940,000 ($0.05 per share) for the corresponding period in 2010. The first quarter loss in 2011 was $482 lower than in the same period a year ago due to the lower stock option expense, offset by higher management service fees.
Cash and short term investments on hand at March 31, 2011 were $13.6 million compared with $15.3 million at December 31, 2010. The cash was used to fund operations and for working capital purposes.
The total number of shares outstanding for the Company was 80,550,061 as at March 31, 2011.