RICHLAND, Wash., Sept. 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
fourth quarter and fiscal year ended June 30, 2016.
For the fiscal year ended June 30,
2016, revenue was $4.77
million, a 4% increase compared to revenue of $4.61 million for the fiscal year ended
June 30, 2015. Prostate brachytherapy
represented 86% and 87% of total revenue for fiscal 2016 and 2015,
respectively. Non-prostate seed brachytherapy revenue increased 26%
in fiscal 2016 compared to fiscal 2015. Operating expenses
were $5.21 million for fiscal 2016
compared to $4.50 million for the
year ended June 30, 2015. Operating
loss was $5.08 million for fiscal
2016, compared to a $4.34 million
operating loss for fiscal 2015. The increased operating loss for
the year ended June 30, 2016 is
primarily due to increased costs associated with the transition to
a new CEO as well as an increase in legal costs related to the
pending class action shareholder lawsuit. These costs were offset
by a non-recurring gain of $0.46
million associated with a change in the asset retirement
obligation estimate regarding the restoration of the present
manufacturing facility to its original state after its lease
expires.
Revenue for the fourth quarter of fiscal 2016 was $1.12 million, a 16.5% decrease compared to
$1.34 million revenue for the fourth
quarter of fiscal 2015. The decrease in revenue is primarily due to
the transition and training of the newly expanded sales and
marketing team which largely occurred during the fourth quarter of
fiscal 2016. Prostate brachytherapy represented 85% and 86% of
total revenue for the fourth quarter of fiscal 2016 and 2015,
respectively. Non-prostate seed brachytherapy revenue increased 11%
in the fourth quarter of fiscal 2016 compared to the fourth quarter
of fiscal 2015. Operating expenses were $1.21 million compared to $1.31 million in the fourth quarter of the last
fiscal year. Increased legal and other general and administrative
expenses of $0.3 million were offset
by a non-recurring gain on change in the asset retirement
obligation estimate of $0.46 million,
which resulted in an overall decrease in operating expenses.
Operating loss was $1.25 million
compared to a $1.10 million loss in
the fourth quarter of fiscal 2015. IsoRay had cash and cash
equivalents and certificates of deposit of $15.4 million as of June
30, 2016, and no debt.
"Fiscal 2016 was a year of significant change for IsoRay," said
Thomas LaVoy, Chairman and CEO.
"With my appointment as CEO in February, we put in place new
executive and sales management teams and instituted a strategic
review to re-focus and re-energize the company. Since completion of
the review we have been building a strong foundation for growth
that is focused on increasing revenue. We are investing in
strategic areas by reallocating funds freed up from tight expense
control and other cost reductions. Most importantly, the sales and
marketing team has been re-staffed with industry veterans with deep
experience in brachytherapy. We believe that there is an
opportunity for IsoRay to provide market leadership in prostate
brachytherapy due to a void left from several years of market
decline and consolidation. Ongoing independent studies of
Cesium-131's superior results in the prostate area support that
strategy. Our new go-to-market strategy is designed to fill the
market leadership gap through our renewed commitment to marketing,
awareness, training and communication. We plan to introduce
IsoRay's new branding and collateral materials at the American
Society for Radiation Oncology (ASTRO) conference in late
September."
IsoRay also continues to collaborate with key institutions to
further develop products for applications to treat cancer in other
areas of the body with Cesium-131. In June
2016, results from a clinical series were presented at the
Society of Neuro–Oncology conference by Dr. David Brachman, Director of Radiation Oncology,
Barrow Neurological Institute. Dr. Brachman reported on the novel
system that GammaTile, LLC developed to treat aggressive recurrent
brain cancers that includes embedding Cesium-131 seeds into
collagen tiles that are placed at the resection margin during
surgery in less than 10 minutes. The non-commercialized device has
been in use for approximately 4 years and has treated over 80
patients. The presentation in June reported on the treatment of a
segment of patients with very aggressive recurrent malignant
meningioma cancer. The report noted 95% local control, despite
multiple failures of previous surgery and radiation, as well as
that the procedure produced limited (5%) radiation injury, a common
occurrence with radiation treatment of the brain. Also in
June 2016, the University of Kentucky presented two clinical
series of Cesium-131 treated women with recurrent and newly
diagnosed gynecological cancers. The alternative treatment option
would be surgical exenteration of all pelvic organs. Both series
were presented at the 2016 World Congress of Brachytherapy
Conference. The series reported 81% control of the 21 patients with
recurrent gynecological cancers and 100% control of 22 of the newly
diagnosed women with very low rates of complications.
Mr. LaVoy remarked that, "In these clinical series, Cesium-131
is being used in the most difficult aggressive brain and
gynecological cancer cases where there are little or no options for
continuing treatment. The high local control rates for these cases
were beyond the treating physicians' expectations and are leading
to expanded use of Cesium-131 at both
institutions."
Mr. LaVoy concluded, "With the implementation of new sales and
marketing programs and other initiatives in the first quarter of
fiscal 2017, we expect a stronger fiscal 2017 for IsoRay with the
impact of our new strategies most evident in the second half of the
fiscal year. IsoRay is in a unique position as the only
manufacturer in the world of Cesium-131, which represents a
significant advancement in cancer therapy with minimal side effects
and at a lower cost than most alternative treatment options. With
more than 10,000 patients treated to date - including
approximately 500 for non-prostate cancers over the last four years
- and ongoing studies providing additional support of its
effectiveness, the new management team is determined to raise
awareness and smooth the path to increased usage of Cesium-131 at
medical institutions across the U.S."
Management of IsoRay will present a corporate overview,
including a review of the company's growth strategy and financial
results for the fiscal year ended June 30,
2016, at the Rodman & Renshaw 18th Annual Global
Investment Conference on Tuesday, September
13, 2016 at 10:00 am ET. A
live webcast of the presentation will be available at
http://wsw.com/webcast/rrshq26/isr. For those who are not available
to listen to the live webcast, a replay will be archived at the
above link for 180 days following the live event, as well as on the
company's website at
http://www.isoray.com/shareholder-presentations/.
IsoRay, Inc.
and Subsidiaries
|
Consolidated
Statements of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended June 30,
|
|
Twelve
months ended June 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Product sales,
net
|
$
1,120,245
|
|
$
1,340,744
|
|
$
4,769,276
|
|
$
4,606,539
|
Cost of product
sales
|
1,167,765
|
|
1,135,782
|
|
4,640,122
|
|
4,439,146
|
Gross profit
(loss)
|
(47,520)
|
|
204,962
|
|
129,154
|
|
167,393
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
142,724
|
|
156,135
|
|
528,049
|
|
614,771
|
Sales and
marketing
|
518,848
|
|
456,054
|
|
1,352,735
|
|
1,488,456
|
General and
administrative
|
1,001,118
|
|
696,528
|
|
3,786,657
|
|
2,400,353
|
Change in
estimate of asset retirement obligation (Note 9)
|
(456,284)
|
|
|
|
(456,284)
|
|
-
|
Total operating
expenses
|
1,206,406
|
|
1,308,717
|
|
5,211,157
|
|
4,503,580
|
|
|
|
|
|
|
|
|
Operating
loss
|
(1,253,926)
|
|
(1,103,755)
|
|
(5,082,003)
|
|
(4,336,187)
|
|
|
|
|
|
|
|
|
Non-operating
income (expense):
|
|
|
|
|
|
|
|
Interest
income
|
51,113
|
|
68,736
|
|
218,145
|
|
282,745
|
Change in fair
value of warrant derivative liability
|
18,000
|
|
(1,000)
|
|
154,000
|
|
374,605
|
Financing and
interest expense
|
-
|
|
1,337
|
|
(950)
|
|
(2,214)
|
Non-operating
income (expense), net
|
69,113
|
|
69,073
|
|
371,195
|
|
655,136
|
|
|
|
|
|
|
|
|
Net
loss
|
(1,184,813)
|
|
(1,034,682)
|
|
(4,710,808)
|
|
(3,681,051)
|
Preferred stock
deemed dividends
|
|
|
|
|
-
|
|
-
|
Preferred stock
dividends
|
(2,658)
|
|
(2,658)
|
|
(10,632)
|
|
(10,632)
|
|
|
|
|
|
|
|
|
Net loss
applicable to common shareholders
|
(1,187,471)
|
|
(1,037,340)
|
|
(4,721,440)
|
|
(3,691,683)
|
|
|
|
|
|
|
|
|
Basic and
diluted loss per share
|
$
(0.02)
|
|
$
(0.02)
|
|
$
(0.09)
|
|
$
(0.07)
|
|
|
|
|
|
|
|
|
Weighted
average shares used in computing net loss per
share:
|
|
|
|
|
|
|
|
Basic and
diluted
|
55,010,619
|
|
54,900,828
|
|
55,014,922
|
|
54,882,350
|
About IsoRay
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 opportunities will be available to expand the market for
Cesium-131 brachytherapy, whether changes to IsoRay's sales and
marketing team and strategy will result in growth or increased
revenue, particularly during the final two quarters of fiscal 2017,
whether changes in IsoRay's overall business strategy will be
successfully implemented or result in growth or increased revenue,
whether IsoRay's institutional collaborations will produce
favorable results or lead to publications, whether peer-reviewed
publications of treatment results using our products will report
favorable results, whether any future clinical series will produce
similar results as those reported in June
2016, 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 beyond prostate,
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 sales and marketing efforts, 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, including those set forth on
our Form 10-K for the year ended June 30,
2016. Unless required to do so by law, IsoRay 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.