TORONTO, March 4, 2014 (GLOBE NEWSWIRE) -- GeneNews Limited (TSX: GEN ) ("GeneNews" or the "Company") today reported operational and financial results for the three-month and full-year periods ended December 31, 2013. All dollar amounts are expressed in Canadian currency unless otherwise indicated and results are reported in accordance with International Financial Reporting Standards.
For 2013, the Company's key priority was to direct its efforts toward launching ColonSentry® broadly across the United States and establishing a reimbursement strategy to demonstrate the value and utility of this groundbreaking test to public and commercial U.S. payers. To support this focus, the Company restructured its operations mid-way through the year, enhancing its commercial capabilities and reducing its overall cost structure, primarily through a reduction in personnel and the closure of its laboratory operations in Richmond Hill.
Key achievements included the July 2013 creation of a joint venture with two private American companies, Health Diagnostic Laboratory, Inc. ("HDL") and a specialized diagnostic sales organization with national capabilities in the diagnostic space, to establish an accredited clinical laboratory, Innovative Diagnostic Laboratory, LLP ("IDL"), the aforementioned August 2013 restructuring of its laboratory operations, and the successful December 2013 debenture conversion.
IDL operates from a single facility in Richmond, Virginia, capable of servicing its entire territory. Start-up operations began during the third quarter of 2013, including set-up and validation of lab facilities, technology transfer, training of laboratory personnel, application for and receipt of CLIA (defined as certified under the Clinical Lab Improvement Amendments Act) and other regulatory licenses, development of marketing materials, sales planning and the development of a comprehensive ColonSentry® reimbursement strategy.
Revenues earned by IDL for 2013 were $0.3 million (US$0.3 million) with costs incurred of approximately $2.6 million (US$2.5 million), resulting in a start-up net loss of approximately $2.3 million (US$2.2 million). As GeneNews has joint control of IDL with its American partners, the Company accounts for its interest in IDL using the equity method. As such, GeneNews reflects its share of the total revenues less total expenses in its consolidated statements of loss and comprehensive loss, which was $0.7 million (US$0.7 million) for the year ended December 31, 2013.
For the year ended December 31, 2013, the Company reported a net loss of approximately $9.4 million or $0.31 loss per common share, as compared to a net loss of approximately $5.1 million, or $0.28 loss per common share for the year ended December 31, 2012. The increased 2013 loss of $4.3 million was primarily due to costs associated with the Company's August strategic restructuring ($1.4 million), the Company's share of loss from IDL ($0.7 million) and non-cash costs associated with the Company's December debenture conversion ($1.1 million). The Company's cash and cash equivalents at December 31, 2013 were approximately $3.0 million.
"The steps implemented in 2013 have laid the foundation for a successful 2014," commented GeneNews' Executive Chairman, James R. Howard-Tripp. "Doctor and patient interest in the ColonSentry® test has been high, we continue to work on a consistent reimbursement profile, and we have made significant progress in building IDL's sales force and scaling-up to a full U.S. launch. Accordingly, we continue to expect that ColonSentry® will be commercially available across the U.S. before the end of the current calendar quarter."
Mr. Howard-Tripp continued, "We have also initiated the roll out of Early CDT® Lung, a second, recent addition to the IDL menu, and will provide progress updates on that in the near future."
GeneNews is committed to helping IDL become a leader in molecular diagnostics and personalized medicine, serving as a strong commercialization outlet for advanced cancer tests. Taking a "multi-view" approach to the diagnosis and treatment of cancer, IDL is working to assemble, through a combination of internal pipeline development, third-party licenses and potential acquisitions, a robust menu of advanced cancer assays to be offered by it throughout the United States.
"Through IDL, sales of ColonSentry® have ramped up considerably in January, with continued growth expected throughout the rest of 2014. As the R&D and new product development component of IDL, GeneNews is in discussions with several entities with respect to in-licensing their products. New test offerings for 2014, including Early CDT®-Lung and the planned addition of other tests to the menu during the first and second quarters of 2014, are expected to significantly enhance IDL's revenue generation capabilities," concluded Mr. Howard-Tripp.
The Company's financial statements and management's discussion and analysis are available on www.sedar.com .
About GeneNews
GeneNews is a company focused on developing and commercializing proprietary molecular diagnostic tests for the early detection of diseases and personalized health management, with a primary focus on cancer-related indications. GeneNews' first product, ColonSentry®, is the world's first blood test to assess an individual's current risk for colorectal cancer. GeneNews' common shares trade on the Toronto Stock Exchange under the symbol 'GEN'. More information on GeneNews and IDL, can be found at www.GeneNews.com and www.myinnovativelab.com .
Forward-Looking Statements
This press release contains forward-looking statements identified by words such as "expects", "will" and similar expressions, which reflect the Company's current expectations regarding future events, including the launch of ColonSentry® test into regions of the U.S. beyond New York and New Jersey, and the assembling of a robust menu of other advanced cancer tests to be offered by IDL. The forward-looking statements involve risks and uncertainties, including market reaction to the launch of the ColonSentry® test into new regions, that could cause the Company's actual events to differ materially from those projected herein. Investors should consult the Company's ongoing quarterly filings and annual reports for additional information on risks and uncertainties relating to these forward-looking statements. The reader is cautioned not to rely on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements, except as required by law.
Company Contact: James R. Howard-Tripp Executive Chairman Office: (905) 739-2030 Investor & Media Contact: Stephen Kilmer Kilmer Lucas Inc. Office: (212) 618-6347 Mobile: (905) 906-6908
