ISR IsoRay Inc

 

 United States Securities And Exchange Commission
Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported):  February 18, 2015
ISORAY, INC. (Exact name of registrant as specified in its charter)
Minnesota (State or other jurisdiction of incorporation)	001-33407 (Commission File Number)	41-1458152 (IRS Employer Identification No.)

 

350 Hills Street, Suite 106, Richland, Washington 99354

(Address of principal executive offices) (Zip Code)

 

(509) 375-1202

(Registrant's telephone number)

  

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨

Written communications pursuant to Rule 425 under the Securities Act

 

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act

 

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

 

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

 

 

Item 2.02.

Results of Operations and Financial Condition

 

On February 18, 2015, IsoRay, Inc. (the "Company") issued a press release announcing its financial results for the quarter and six months ended December 31, 2014, the text of which is attached hereto as Exhibit 99.1.

 

The information in this Current Report on Form 8-K, including the exhibit, is furnished pursuant to Item 2.02 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

 

In addition to historic information, this report, including the exhibit, contains forward-looking statements regarding events, performance and financial trends. Various factors could affect future results and could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Some of those factors are identified in the Company’s periodic reports filed with the Securities and Exchange Commission, the most recent of which are the Company’s Annual Report on Form 10-K for the year ended June 30, 2014 and the Company's Quarterly Report on Form 10-Q for the quarter ended December 31, 2014.

 

Item 9.01.

Financial Statements and Exhibits

 

(d)

Exhibits

 

Exhibit		Description
99.1		Press release issued by IsoRay, Inc., dated February 18, 2015.

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: February 18, 2015

 

 

	IsoRay, Inc., a Minnesota corporation
	By:	/s/ Dwight Babcock
		Dwight Babcock, CEO

  

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

 

ISORAY, INC. REPORTS SECOND QUARTER RESULTS

 

Published Reports Confirm Cesium-131 is a True Success in Treating Cancer

 

RICHLAND, Washington (February 18, 2015) – IsoRay, Inc. (NYSE MKT: ISR), a medical technology company and innovator in seed brachytherapy and medical radioisotope applications for the treatment of prostate, brain, lung, head and neck and gynecological cancers, announced its financial results for the quarter and six months ended December 31, 2014. With over $20,000,000 of cash on hand and no debt, IsoRay is positioned to be a dominant player in the brachytherapy cancer treatment market.

 

IsoRay’s team remains focused in diversifying its product offerings through institutional based studies designed to address various aggressive cancers that to date often fail current standard of care options. Management is hopeful that the lingering decline in the prostate market may be bottoming out. Management anticipates seeing modest gains in IsoRay’s market share as well as some revenue growth in the coming quarters. We experienced a negative impact on our international sales efforts during the quarter ended December 31, 2014, with the devaluation of the Euro causing our products to become higher in price, making it more difficult to attract new adopters in this market.

 

Management is very pleased with the release of the third peer-reviewed publication supporting the use and success of Cesium-131 for prostate cancer. This follows on the heels of two other publications reporting significant success in treating metastatic brain cancers and gynecological cancers. The most recent report, by the University of Pittsburg Medical Center (UPMC), covers a 9 year effort to date on using Cesium-131 for the treatment of low and intermediate prostate cancer. The conclusion was: Cesium-131 seed brachytherapy offers extremely high efficacy compared to other isotopes or treatment modalities used in treating prostate cancer, with the advantage of rapid return to pre-treatment urinary function and at lower cost.

 

Brachytherapy treatments are now being discussed with greater frequency as evidenced by several new publications supporting brachytherapy as a financially prudent treatment as well as highly effective cancer treatment. Brachytherapy offers some of the best results for the patient, fewer and less severe side effects, faster recovery back to base line and at the lowest industry cost. This is further supported by the recent article published in the International Journal of Radiation Oncology, authored by physicians at Stanford University, titled “The Case for Prostate Brachytherapy in the Affordable Care Act Era” http://www.redjournal.org/article/S0360-3016(14)04265-5/pdf. This article concluded: in low risk prostate cancer, brachytherapy demonstrates the opportunity to benefit patients, payers and institutions, and radiation oncologists should be proactive in the reintroduction and expansion of brachytherapy for prostate cancer.

 

In another recent publication in the Journal of Clinical Oncology titled “Where Have You Gone Brachytherapy” http://hwmaint.jco.ascopubs.org/cgi/content/full/JCO.2014.59.8128v1, the authors cite a study by Dr. Steven J. Frank, et al. that concluded “there is no greater value for the treatment of localized prostate cancer than brachytherapy”. While IsoRay remains committed to the expanding its presence in the prostate market, management will continue its strategic focus to promote the use of Cesium-131 to combat cancers in numerous other body sites. We are extremely pleased with the effectiveness of Cesium-131 as a treatment solution for brain cancer, head and neck cancer, lung cancer, prostate cancer and gynecological cancers while providing far better quality of life for the patient than other alternatives.

 

Management is seeing a growing awareness of Cesium-131 as more abstracts, posters and now medical journals report significant success stories using Cesium-131 in treating metastatic brain, gynecological and prostate cancer. These published peer reviewed studies have created a rise in leading medical institutions preparing to duplicate these study results independently and/or participate in an existing multi-institutional study. Outstanding medical centers continue to perform Cesium-131 cases following reports by Weill Cornell, University of Kentucky and UPMC of their experiences with Cesium-131. Some notable names now utilizing Cesium-131 in treating tumors in various body sites include Massachusetts General Hospital, Johns Hopkins, Harvard Affiliate Brigham and Women’s, Princeton, New York Presbyterian, Rutgers Medical School and Barrow Neurological Institute.

 

 

With the anticipated addition of new studies being launched and the expectation of other study results being made public through future peer reviewed publications, management expects awareness of Cesium-131 to grow within the medical community.

 

IsoRay continues to invest in R&D data protocols geared to showing improved efficacy over current cancer treatments while providing the patient with an improved quality of life experience. Several new studies are expected to launch in the near future in various body sites. These will likely include focal treatment for prostate cancer, a head and neck cancer study and a GliaSite balloon catheter brain cancer treatment utilizing Cesitrex, our liquid form of Cesium-131. IsoRay Chairman and CEO Dwight Babcock commented, “Clinical evidence provided through protocols performed by major medical centers that prove utilizing Cesium-131 is either equal to or better than the current standard of care alternatives, with patients enjoying an improved quality of life, remains the key to IsoRay’s success. These studies also aid in generating awareness and ultimately general adoption by community hospitals and physicians, which will in turn drive consumers to our product offerings. To this end IsoRay is totally committed and given this growing acceptance and interest in our now published results, we remain committed to our strategic sales and marketing objectives, which we believe will contribute to long term growth and achieving profitability."

 

IsoRay, Inc. and Subsidiaries

 

Consolidated Statements of Operations

 

(Unaudited)

 

		For the three								For the six
		months ended								months ended
		December 31,								December 31,
		2014				2013				2014				2013
Product sales, net		$	1,065,585			$	1,085,408			$	2,107,686			$	2,135,323
Cost of product sales			1,103,549				1,119,314				2,200,452				2,246,537
Gross loss			(37,964	)			(33,906	)			(92,766	)			(111,214	)
Operating expenses:
Research and development expenses			140,627				170,030				317,237				317,020
Sales and marketing expenses			303,783				326,467				657,526				685,652
General and administrative expenses			537,940				513,964				1,113,891				1,165,000
Total operating expenses			982,350				1,010,461				2,088,654				2,167,672
Operating loss			(1,020,314	)			(1,044,367	)			(2,181,420	)			(2,278,886	)
Non-operating income (expense):
Interest income			72,360				481				145,055				835
Change in fair value of warrant derivative liability			41,000				117,000				347,000				81,000
Financing and interest expense			-				(86	)			(3,451	)			(827	)
Non-operating income (expense), net			113,360				117,395				488,604				81,008
Net loss			(906,954	)			(926,972	)			(1,692,816	)			(2,197,878	)
Preferred stock deemed dividends (Note 10)			-				-				-				(726,378	)
Preferred stock dividends			(2,658	)			(2,658	)			(5,316	)			(5,316	)
Net loss applicable to common shareholders		$	(909,612	)		$	(929,630	)			(1,698,132	)			(2,929,572	)
Basic and diluted loss per share		$	(0.02	)		$	(0.02	)		$	(0.03	)		$	(0.08	)
Weighted average shares used in computing net
loss per share:
Basic and diluted			54,883,445				38,419,502				54,875,749				37,133,875

 

The accompanying notes are an integral part of these financial statements

  

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About IsoRay

 

IsoRay, Inc., through its subsidiary, IsoRay Medical, Inc. is the sole producer of Cesium-131 brachytherapy seeds, which is expanding brachytherapy options throughout the body. Learn more about this innovative Richland, Washington company and explore the many benefits and uses of GliaSite® and Cesium-131 by visiting www.isoray.com. Join us on Facebook/Isoray. Follow us on Twitter@Isoray.

 

Contact: 

IsoRay Medical
(509) 375-1202
info@Isoray.com

 

OR

 

Worldwide Financial

(954) 360-9998

Info@wwfinancial.com

 

 

Safe Harbor Statement

 

Statements in this news release about IsoRay’s future expectations, including: the advantages of our products and their delivery systems, future demand for IsoRay’s existing and planned products, whether revenue and other financial metrics will improve in future periods, whether IsoRay will be able to continue to expand its base beyond prostate cancer, whether sales of our products will continue at historic levels or increase, whether the use of our products will increase or continue, whether additional medical centers will begin using our products, whether additional studies will be published or presented with favorable outcomes from treatment with our products, whether we will continue to receive support from industry leaders, whether awareness of our products in the medical community will continue or increase, whether future studies of treatment of various cancers using our products will have favorable results, and all other statements in this release, other than historical facts, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”). This statement is included for the express purpose of availing IsoRay, Inc. of the protections of the safe harbor provisions of the PSLRA.  It is important to note that actual results and ultimate corporate actions could differ materially from those in such forward-looking statements based on such factors as physician acceptance, training and use of IsoRay’s products, changing levels of demand for IsoRay’s current and proposed future products, IsoRay’s ability to reduce or maintain expenses while increasing sales, patient results achieved using our products in both the short and long term, success of future research and development activities, patient results achieved when Cesium-131 is used for the treatment of cancers and malignant diseases beyond prostate cancer, IsoRay’s ability to successfully manufacture, market and sell its products, IsoRay’s ability to manufacture its products in sufficient quantities to meet demand within required delivery time periods while meeting its quality control standards, the success of our sales and marketing efforts, IsoRay’s ability to enforce its intellectual property rights, changes in reimbursement rates, changes in laws and regulations applicable to our products, whether additional studies and protocols are released and support the conclusions of past studies and protocols, whether ongoing patient results with our products are favorable and in line with the conclusions of clinical studies and initial patient results, whether we, our distributors and our customers will successfully obtain and maintain all required regulatory approvals and licenses to market, sell and use our products in their various forms, continued compliance with ISO standards as audited by BSI, and other risks detailed from time to time in IsoRay’s reports filed with the SEC.