IMI announces second quarter results TORONTO, Aug. 12
/PRNewswire-FirstCall/ -- IMI International Medical Innovations
Inc. (TSX:IMI; Amex: IME), a leader in predictive medicine, today
announced financial results for the second quarter of fiscal 2004
ended June 30, 2004 (Q2 2004). "During the second quarter IMI
achieved several important and exciting milestones," said Dr. Brent
Norton, President and Chief Executive Officer. "We concluded an
exclusive worldwide license agreement with McNeil Consumer
Healthcare that builds on the existing Canadian and North American
laboratory agreement for our predictive cardiovascular disease
test, branded as PREVU(x) Coronary Heart Disease Predictor. This
agreement positions IMI to capitalize on significant commercial
potential in multiple fields of use, in the U.S., European and
other major markets around the world. Further, we made an initial
shipment of product to McNeil, recording $100,000 in sales
revenue." Dr. Norton continued, "Our cancer franchise also
continued to build strong momentum. New data on LungAlert(TM) was
presented at the American Thoracic Society conference in May to a
very favorable response. The data showed that our test may be
useful as an initial screening test to identify high-risk subjects,
which is encouraging given that there is currently no simple,
widely available screening test for lung cancer. Such forums, which
are important opportunities to present and publish data, are
critical to building acceptance of IMI's novel approach to
screening for disease." "More recently, positive study results for
our breast cancer test were published in the prestigious journal
Cancer," Dr. Norton continued. "The study results showed that our
test could differentiate between early-stage cancerous and
non-cancerous samples in women with Stage 1 breast cancer. The next
step, anticipated later this year, will be to initiate a pivotal
study with the aim of confirming and extending these findings."
Also during the second quarter, Tim Currie was appointed Vice
President, Corporate Development. Since joining IMI as Director,
Business Development, Mr. Currie has successfully built strategic
relationships, including the recent worldwide license agreement
with McNeil. In his new role, Mr. Currie will drive strategic
initiatives to enhance the value of the company and its product
opportunities. In addition, Ron Henriksen was elected to the
company's Board of Directors at IMI's annual shareholders' meeting
in June. Mr. Henriksen has more than 30 years of experience in the
healthcare field, working in the pharmaceutical, biotechnology,
consulting and venture capital industries. He brings proven
expertise in the U.S. and global marketplaces, having completed
more than 65 licensing, research collaboration and acquisition
agreements with a variety of partners. Subsequent Events
----------------- In late July, IMI was notified that an abstract
titled Skin Tissue Cholesterol is Associated with Angina, Diabetes,
and History of Stroke/TIA in Subjects with Coronary Artery Disease,
by M. Gupta, M. Tsigoulis, and M. Evelegh, has been accepted for
presentation at the Canadian Cardiovascular Conference, which will
be held on October 23 - 29, 2004, in Calgary, Alberta. Also
subsequent to quarter end, IMI learned that two of its U.S. skin
cholesterol patents have been listed as abandoned by the United
States Patent and Trademark Office (PTO) for failure to pay
maintenance fees. The failure to pay these maintenance fees appears
to have occurred while management of the files was being
transferred between U.S. and Canadian patent agents. "Maintenance
fees are to be paid periodically, and companies typically rely on
patent counsel and other services to monitor and make these
payments on time," said Dr. Norton. "IMI and its agents have
initiated the process to seek reinstatement of the patents. This
process could take several months and there is no assurance that we
will be successful. Most importantly, at this time our
commercialization plans for PREVU(x) have not been affected."
Outlook ------- "To have taken our first product from development
through to commercialization is a major achievement," said Dr.
Norton. "We are now working to expand our clinical program with new
studies, which will help to further validate IMI's products. New
data helps advance the regulatory process, is a valuable marketing
tool and drives global awareness of IMI's unique predictive
medicine tests." "Over the past several years, we have assembled a
team with depth of expertise as well as a strong portfolio of
technologies, both of which equip IMI to replicate its success with
PREVU(x) with the cancer franchise. Overall, we are making
excellent progress towards our strategic goals, while building
international enthusiasm and acceptance of new approaches to
screening for disease." Financial Review ---------------- IMI's
consolidated loss for the second quarter was $1,480,000, or $0.07
per share compared with $833,000 or $0.04 per share for the quarter
ended June 30, 2003 (Q2 2003). For the six months ended June 30,
2004, IMI's net loss was $2,562,000 or $0.12 per share compared
with $1,644,000 or $0.08 per share in the same period last year. In
Q2 2004, IMI made initial shipments of PREVU(x) to its marketing
partner, McNeil Consumer Healthcare, recording the company's first
$100,000 in net sales. As noted above, during the quarter IMI
completed a worldwide licensing agreement with McNeil. In
accordance with the financial terms of the agreement, IMI received
an upfront payment of $3.0 million and will receive additional
payments of up to approximately $15.75 million upon the achievement
of specific milestones, which is in addition to the $3.3 million in
milestones from IMI's existing Canadian license agreement. The
upfront cash payment has been deferred in accordance with
accounting requirements and is being recognized into income over
the term of the agreement. Therefore, $26,725 was reported as
license revenue for Q2 2004. As at June 30, 2004 the company had
cash, cash equivalents and short-term investments totaling
$7,194,000 ($6,700,000 at December 31, 2003). Based on historic
burn rates and the current expectation of revenues from partnering
activities and product sales, management believes the company's
cash resources, together with investment tax credits receivable,
are sufficient to meet current operating and capital requirements.
Second quarter research and development expenditures increased by
$433,000 to $776,000 from $343,000 in Q2 2003, reflecting the
following: - Spending on clinical trials for skin sterol and cancer
increased by $95,000 to $112,000 from $17,000 in Q2 2003. This
includes several new trials that commenced in the latter part of
2003; - Expenditures on intellectual property increased to $32,000
from $15,000 in Q2 2003; - Subcontract research increased by
$80,000 in support of the design and development of new formats of
the skin sterol technology; - Salaries and benefits increased by
$147,000, reflecting annual increases plus incentive compensation
based on achievement of pre-determined milestones; and - Non-cash
expenses related to stock-based compensation for research were
$56,000 compared with $1,000 for Q2 2003. Total research
expenditures for the six months ended June 30, 2004 and June 30,
2003 amounted to $1,348,000 and $697,000, respectively. Other
development costs remained at fairly constant levels. General and
administration expenses amounted to $766,000 in Q2 2004 compared
with $594,000 in Q2 2003, representing an increase of $172,000 and
reflecting the following: - Professional fees increased by $36,000,
in part related to the global licensing agreement; - Liability
insurance expense increased by $21,000 from Q2 2003 as a result of
the September 2003 U.S. listing on the American Stock Exchange.
However, other expenses related to the U.S. listing were lower by
$51,000 in Q2 2004 compared with Q2 2003; - Salaries and benefits
increased by $105,000 over 2003 levels, reflecting annual increases
plus incentive compensation based on achievement of pre-determined
milestones; and - Non-cash expenses related to stock-based
compensation for administration were $51,000 compared with $8,000
for Q2 2003. Total general and administration expenses for the six
months ended June 30, 2004 and June 30, 2003 amounted to $1,287,000
and $1,113,000, respectively. Amortization expenses for equipment
and acquired technology for the three months and six months ended
June 30, 2004 amounted to $63,000 and $120,000, respectively. This
is an increase of $18,000 and $33,000, respectively, over the
corresponding periods in 2003. Purchases of equipment to support
clinical trials and manufacturing amounted to $78,000 and $151,000
for the three and six months ended June 30, 2004, respectively.
Interest income amounted to $30,000 for the quarter compared with
$57,000 for Q2 2003. This decrease resulted from lower interest
rates on invested cash and lower cash balances through most of the
quarter.
------------------------------------------------------------------------
Conference Call and Webcast --------------------------- IMI will
hold a conference call and webcast to discuss second quarter
results today at 10:30 a.m. ET. To listen to the call, please dial
416-640-4127 or 1-800-814-4857, or visit
http://www.imimedical.com/. A rebroadcast of the call will be
available until Thursday, August 19, 2004. Please dial 416-640-1917
or 1-877-289-8525 and enter the passcode 21070149 followed by the
number sing.
-------------------------------------------------------------------------
About IMI IMI is a world leader in predictive medicine, dedicated
to developing rapid, non-invasive tests for the early detection of
life-threatening diseases. IMI's cardiovascular products, which are
branded as PREVU(x) Coronary Heart Disease Predictor, will be
marketed and distributed worldwide by McNeil Consumer Healthcare.
The company's cancer tests include ColorectAlert(TM), LungAlert(TM)
and a breast cancer test. IMI's head office is located in Toronto,
and its research and product development facility is at McMaster
University in Hamilton, Ontario. For further information, please
visit http://www.imimedical.com/. This release contains
forward-looking statements that reflect the company's current
expectations regarding future events. The forward-looking
statements involve risks and uncertainties. Actual events could
differ materially from those projected herein and depend on a
number of factors including, but not limited to, changing market
conditions, successful and timely completion of clinical studies,
uncertainties related to the regulatory approval process,
establishment of corporate alliances and other risks detailed from
time to time in the company's quarterly, annual and other
regulatory filings. Financial statements are attached to this
release. The company's complete second quarter report is available
on IMI's website.
-------------------------------------------------------------------------
IMI International Medical Innovations Inc. Incorporated under the
laws of Canada
-------------------------------------------------------------------------
Consolidated Balance Sheets (in Canadian Dollars) (Unaudited) As at
June 30, 2004 and December 31, 2003 June 30 December 31 2004 2003
-------------------------------------------------------------------------
ASSETS Current Cash and cash equivalents $ 2,257,175 $ 61,625
Short-term investments 4,936,769 6,635,135 Accounts receivable
53,500 - Prepaid expenses and other receivables 237,926 340,489
Investment tax credits receivable 280,000 180,000
-------------------------------------------------------------------------
Total current assets 7,765,370 7,217,249
-------------------------------------------------------------------------
Capital assets, net 476,757 403,205 Acquired technology, net
408,216 453,573
-------------------------------------------------------------------------
$ 8,650,343 $ 8,074,027
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY Current Accounts payable $
277,249 $ 139,435 Accrued liabilities 251,550 403,213
-------------------------------------------------------------------------
Total current liabilities 528,799 542,648
-------------------------------------------------------------------------
Deferred revenue 3,064,650 93,100
-------------------------------------------------------------------------
Total liabilities 3,593,449 635,748
-------------------------------------------------------------------------
Shareholders' equity Capital Stock 25,069,827 24,780,846 Warrants
204,200 312,200 Deficit (20,217,133) (17,654,767)
-------------------------------------------------------------------------
Total shareholders' equity 5,056,894 7,438,279
-------------------------------------------------------------------------
$ 8,650,343 $ 8,074,027
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
IMI International Medical Innovations Inc.
-------------------------------------------------------------------------
Consolidated Statements of Loss and Deficit (Unaudited) Three
months ended June 30 Six months ended June 30
-------------------------- -------------------------- 2004 2003
2004 2003
-------------------------------------------------------------------------
REVENUE Sales revenue $ 100,000 $ - $ 100,000 $ - License revenue
26,725 1,725 28,450 3,450
-------------------------------------------------------------------------
126,725 1,725 128,450 3,450 Cost of sales 93,464 - 93,464 -
-------------------------------------------------------------------------
Gross Profit 33,261 1,725 34,986 3,450
-------------------------------------------------------------------------
EXPENSES Research and development 776,392 342,707 1,347,502 697,479
General and administration 766,149 594,051 1,286,703 1,112,848
Amortization 63,023 44,601 120,291 87,401
-------------------------------------------------------------------------
1,605,564 981,359 2,754,496 1,897,728
-------------------------------------------------------------------------
RECOVERIES AND OTHER INCOME Investment tax credits 63,000 77,583
100,000 115,583 Interest 29,637 69,477 57,144 134,959
-------------------------------------------------------------------------
92,637 147,060 157,144 250,542
-------------------------------------------------------------------------
Net loss for the period (1,479,666) (832,574) (2,562,366)
(1,643,736) Deficit, beginning of period (18,737,467) (14,403,218)
(17,654,767) (13,592,056)
-------------------------------------------------------------------------
Deficit, end of period $(20,217,133) $(15,235,792) $(20,217,133)
$(15,235,792)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Basic and diluted loss per share $ (0.07) $ (0.04) $ (0.12) $
(0.08)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted average number of common shares outstanding 21,264,052
20,927,277 21,263,515 20,871,084
-------------------------------------------------------------------------
-------------------------------------------------------------------------
IMI International Medical Innovations Inc.
-------------------------------------------------------------------------
Consolidated Statements of Cash Flows (Unaudited) Three months
ended June 30 Six months ended June 30 --------------------------
-------------------------- 2004 2003 2004 2003
-------------------------------------------------------------------------
OPERATING ACTIVITIES Net loss for the period $ (1,479,666) $
(832,574) $ (2,562,366) $ (1,643,736) Add items not involving cash
Amortization 69,623 44,601 126,891 87,401 Stock compensation costs
included in: Research and development expense 55,887 1,080 76,069
4,166 General and administrative expense 50,963 8,025 85,144 21,270
Loss on sale of capital asset - 5,230 - 5,230
-------------------------------------------------------------------------
(1,303,193) (773,638) (2,274,262) (1,525,669) Net change in
non-cash working capital balances related to operations (211,559)
11,850 (72,815) (92,527) Increase (decrease) in deferred revenue
2,973,275 (1,725) 2,971,550 (3,450)
-------------------------------------------------------------------------
Cash provided by (used in) operating activities 1,458,523 (763,513)
624,473 (1,621,646)
-------------------------------------------------------------------------
INVESTING ACTIVITIES Short term investments 623,950 754,961
1,698,366 1,452,765 Purchase of capital assets (77,653) (21,920)
(150,657) (31,432)
-------------------------------------------------------------------------
Cash provided by investing activities 546,297 733,041 1,547,709
1,421,333
-------------------------------------------------------------------------
FINANCING ACTIVITIES Issuance of capital stock, net 12,500 - 23,368
143,000
-------------------------------------------------------------------------
Cash provided by financing activities 12,500 - 23,368 143,000
-------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents during the
period 2,017,320 (30,472) 2,195,550 (57,313) Cash and cash
equivalents - Beginning of period 239,855 123,610 61,625 150,451
-------------------------------------------------------------------------
- End of period $ 2,257,175 $ 93,138 $ 2,257,175 $ 93,138
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Represented by Cash $ 891,391 $ 93,138 $ 891,391 $ 93,138 Cash
equivalents 1,365,784 - 1,365,784 -
-------------------------------------------------------------------------
$ 2,257,175 $ 93,138 $ 2,257,175 $ 93,138
-------------------------------------------------------------------------
-------------------------------------------------------------------------
DATASOURCE: IMI International Medical Innovations Inc. CONTACT:
Sarah Borg-Olivier, Director, Communications, T: (416) 222-3449, ;
Ron Hosking, Vice President, Finance and CFO, T: (416) 222-3449,
Copyright