RICHLAND, Wash., Nov. 8, 2016 /PRNewswire/ -- 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, today announced its financial results for the
first quarter of fiscal 2017, ended September 30,
2016.
Revenue for the first quarter was $1.08 million, a 14%
decrease compared to $1.26 million revenue for the first
quarter of fiscal 2016. The decrease in revenue is primarily due to
the transition and training of the newly expanded sales and
marketing team, which were largely hired in the fourth quarter of
fiscal 2016. Prostate brachytherapy represented 89% of total
revenue for the first quarters of both fiscal 2017 and fiscal 2016.
Operating expenses were $1.62 million compared
to $1.17 million in the first quarter of the last fiscal
year. Increases in expenses are attributed to the significant
increase in sales and marketing investments in personnel, website
re-design, marketing collateral and consulting for market
development of $0.25 million, an
increase in quality, training and finance staff of $0.13 million and approximately $0.07 million in one-time expenses related to
year-end public company costs. Operating loss was $1.57
million compared to a $1.09 million loss in the
first quarter of fiscal 2016. IsoRay had cash, cash equivalents and
certificates of deposit of $13.7 million as
of September 30, 2016, and no debt.
"The first quarter was a transition quarter for IsoRay as the
Company focused on training new sales personnel and launching our
new sales programs, collateral materials, branding and corporate
website in advance of the important American Society for Radiation
Oncology Conference (ASTRO) in late September," said Thomas
LaVoy, Chairman and CEO. "During the quarter we also began the
process to automate our manufacturing operations. When completed,
which is expected by the end of the second quarter of fiscal 2018
(which ends on December 31, 2017),
the resulting improvement in the efficiency of our manufacturing
and production processes is expected to reduce our production costs
and allow for significant expansion, when needed, with reduced
additional overall costs to the Company. We also reached a
settlement agreement for the securities lawsuit, with the costs
covered by our directors and officers (D&O) insurance.
Preliminary approval of the settlement by the presiding judge was
granted in October, with final approval of all settlement terms and
conditions to be considered at a scheduled court hearing in
March 2017. While there was an uptick
in expenses in the quarter, these were planned expenses and relate
to costs for the new sales and marketing programs plus an
additional investment in quality and training personnel to support
the expanded and more aggressive market development efforts. In
addition to these costs, there were a number of one-time items for
new customer facing initiatives as well as customary year-end
public company expenses."
"At the ASTRO Conference, numerous positive developments for the
brachytherapy industry were presented. A preliminary review of
randomized trial outcomes for the ASCENDE-RT study for high risk
patients indicated that combination treatment utilizing
brachytherapy, external beam radiation and hormones together, had
significantly improved long-term results over all other treatment
options. In addition, the RTOG study 0232 randomized trial
comparing mono-brachytherapy versus external beam and brachytherapy
for intermediate risk patients, showed little or no difference in
outcomes between the two treatments. This study was conducted by
the Radiation Therapy Oncology Group which carries out large,
multi-institutional studies to evaluate hypotheses in radiation
oncology. The results of both these trials were encouraging for the
brachytherapy industry and could provide the catalyst for a
resurgence in growth for new brachytherapy treatment opportunities.
We are also continuing to explore a number of other potential
opportunities, including joint ventures, and remain supportive of
independent research using Cesium-131 brachytherapy products in the
other areas of the body that we are focused on."
"To date, all of our new initiatives have been rolled out on
time and according to plan. Our new sales strategies have been well
received, in part due to the growing knowledge of IsoRay's renewed
commitment to increasing usage of Cesium-131 brachytherapy
products, which has led to newfound trust by potential customers
that we will continue investing in the industry, our product and
training for its use. The experience and relationships of the
recent additions to our sales and marketing team have also been
helpful in paving the way to deeper conversations with potential
new users of our product. IsoRay is uniquely the only manufacturer
in the world of Cesium-131 brachytherapy products, which represents
a significant advancement in cancer therapy with minimal side
effects and at a lower cost than most alternative treatment
options. We believe that we've built a strong foundation for growth
since my appointment as CEO less than one year ago, and as our new
sales and marketing programs gain traction as the fiscal year
progresses, we continue to expect a stronger second half, and are
still targeting the annual revenue increase of approximately 20%
year-over-year in accordance with the plan developed by management
for fiscal 2017 as we have previously stated," concluded Mr.
LaVoy.
About IsoRay, Inc.
IsoRay, Inc., through its subsidiary, IsoRay Medical, Inc. is
the sole producer of Cesium-131 brachytherapy seeds, which are
expanding brachytherapy options throughout the body. Learn more
about this innovative Richland,
Washington Company and explore the many benefits and uses of
Cesium-131 by visiting www.isoray.com. Join us on Facebook/IsoRay.
Follow us on Twitter @IsoRay.
Safe Harbor Statement
Statements in this news release about IsoRay's future
expectations, including: the advantages of our products and their
delivery systems; whether interest in and use of our products will
increase or continue; whether the new sales and marketing team and
strategies will increase patient or clinician engagement and
interest; whether automation of manufacturing processes will
improve efficiency, reduce costs, or allow for lower cost
expansion; whether one-time expenses will not reoccur; whether
future studies will report positive treatment results; whether
studies of brachytherapy generally will be favorable or will
revitalize the industry; whether revenue will increase in the
second half of the fiscal year and at a sufficient amount to show a
20% annual increase; 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 our products, our ability
to successfully manufacture, market and sell our products, our
ability to manufacture our products in sufficient quantities to
meet demand within required delivery time periods while meeting our
quality control standards, our ability to enforce our intellectual
property rights, whether additional studies are released and
support the conclusions of past studies, whether ongoing patient
results with our products are favorable and in line with the
conclusions of clinical studies and initial patient results,
patient results achieved when our products are used for the
treatment of cancers and malignant diseases, successful completion
of future research and development activities, 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 its various forms, continued
compliance with ISO standards as audited by BSI, the success of our
revamped sales and marketing efforts particularly in the prostate
market, the impact that "watchful waiting" causes ongoing declines
in demand for our products, the use of our competitors' products in
lieu of ours by recommending physicians, changes in reimbursement
rates, changes in laws and regulations applicable to our products,
and other risks detailed from time to time in IsoRay's reports
filed with the SEC. Unless required to do so by law, the Company
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
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SOURCE IsoRay, Inc.