TORONTO, Aug. 09, 2024 (GLOBE NEWSWIRE) -- Spectral Medical Inc. (“Spectral” or the “Company”) (TSX: EDT), a late-stage theranostic company advancing therapeutic options for sepsis and septic shock, today announced its financial results for the second quarter ended June 30, 2024, and provided a corporate update.
Spectral has continued its significant progress throughout the second quarter of 2024 both clinically and operationally and year-to-date enrolled 45 patients for a total of 126 patients out of the 150 total patients target. The Company is focused on the final push to fully enroll and finish the Tigris trial and believes that the continued onboarding of new Tigris sites since the fourth quarter of 2023 could further accelerate enrollment and allow Spectral to rapidly reach the 150-patients target, bringing the Company closer to FDA submission and potential FDA approval. In parallel to its clinical trial, the Company continues to work closely with its commercialization partner, Baxter.
Dr. John Kellum, Chief Medical Officer of Spectral Medical, stated, “We continue to witness robust enrollment activity in 2024, with record enrollment rates since the beginning of the year. Tigris is gathering momentum as we enter the final months of the trial. We have a very strong group of sites and very dedicated investigators, and the excitement level has never been higher. Our clinical team is focused on trial site support with activities to ensure that our Tigris sites have the support and resources to enroll patients as efficiently as possible. We are committed alongside our trial sites to advancing Tigris and believe PMX, if ultimately approved, will play a major role in reducing the tragic rates of mortality caused by sepsis.”
“I am pleased with the increased level of activity across the Company and the resultant ramp up of patient enrollment. The potential to sustain our current pace of enrollment could see us rapidly advance the trial towards completion in the late 2024 timeframe,” said Chris Seto, Chief Executive Officer of Spectral. “Additionally, with the receipt of gross proceeds of approximately $11 million since the beginning of April, we have secured funding to finalize Tigris enrollment.”
Corporate Highlights During & Subsequent to Second Quarter 2024
Tigris Trial and Regulatory Program
PMX Commercialization
Funding
Addition to Spectral Board of Directors
Change of Auditors
Financial Review
Revenue for the three-months ended June 30, 2024 was $471,000 compared to $306,000 for the same three-month period last year, representing an increase of $165,000 or 54%. Revenue for the six-months ended June 30, 2024, was $1,139,000 and $836,000 for the same period last year, representing an increase of $303,000 or 36%. Royalty revenue for the three-months ended June 30, 2024 was NIL and NIL for the same period the prior year. Royalty revenue for the six-months ended June 30, 2024 was $135,000 compared to $126,000 for the same six-month period last year. This is due to an increase in usage of the Company’s IP from one customer. Product Revenue for the three-months ended June 30, 2024 was $218,000 compared to $139,000 for the same three-month period last year, representing an increase of $79,000 or 56%. Product revenue for the six-months ended June 30, 2024 was $567,000 and $376,000, representing an increase of $191,000 or 51%.
Operating expenses for the three-months ended June 30, 2024, were $4,873,000, compared to $4,594,000 for the same period in the prior year, an increase of $279,000, or 6%. Interest expense increased by $418,000 due to convertible notes payable issued on September 7, 2023 and May 30, 2024. Also, an increase in the raw material and consumables used, and foreign exchange loss.
Operating expenses for the six-months ended June 30, 2023, were $9,698,000 compared to $6,219,000 for the same period in the prior year, an increase of $3,479,000 or 56%. The change is primarily due to an increase in foreign exchange loss of $781,000, interest expense increase of $711,000, fair value adjustment derivative liability increase of $455,000 and amortization expense increase of $516,000. All these increases are due to the funding received during September 2023 and May 2024. In addition, share-based compensation expense increased by $295,000. Lastly, consulting and professional fees increased by $270,000 due to increased site and patient fees related to the Tigris trial.
Clinical development and regulatory program costs were $1,413,000 for the three-months ended June 30, 2024 compared to $1,563,000 for the same period in the prior year. For the six-months ended June 30, 2024, clinical development costs were $2,377,000 compared to $1,994,000 for the corresponding period the prior year. A significant portion of clinical trial and regulatory costs consists of consulting and professional fees paid to contract research organizations, clinical sites, and other clinical and regulatory consultants. The increase in costs reflects increased activity with respect to the initialization of clinical sites and the randomization of patients into the Tigris clinical trial.
Loss for the three-months ended June 30, 2024 was $4,402,000, $(0.02) per share compared to a loss of $4,239,000, $(0.02) per share for the same period in the prior year. The increased loss of $163,000 was due to increased operating expenses, partially offset by a reduction in loss from discontinued operations of $49,000 related to the reduction in Dialco operating expenses.
Loss for the six-months ended June 30, 2024 was $8,562,000, $(0.03) per share, compared to a loss of $5,377,000, $(0.02) per share, for the same period in the prior year. The increased loss of $3,185,000 was due to operating expenses, partially offset by a reduction in loss from discontinued operations of $3,000 related to the reduction in Dialco operating expenses.
The Company concluded the second quarter of 2024 with cash of $7,536,000 compared to $2,952,000 of cash on hand as of December 31, 2023.
The total number of common shares outstanding for the Company was 281,245,539 at June 30, 2024.
About Spectral
Spectral is a Phase 3 company seeking U.S. FDA approval for its unique product for the treatment of patients with septic shock, Toraymyxin™ (“PMX”). PMX is a therapeutic hemoperfusion device that removes endotoxin, which can cause sepsis, from the bloodstream and is guided by the Company’s Endotoxin Activity Assay (EAA™), the only FDA cleared diagnostic for the risk of developing sepsis.
PMX is approved for therapeutic use in Japan and Europe and has been used safely and effectively on more than 340,000 patients to date. In March 2009, Spectral obtained the exclusive development and commercial rights in the U.S. for PMX, and in November 2010, signed an exclusive distribution agreement for this product in Canada. In July 2022, the U.S. FDA granted Breakthrough Device Designation for PMX for the treatment of endotoxic septic shock. Approximately 330,000 patients are diagnosed with septic shock in North America each year.
The Tigris Trial is a confirmatory study of PMX in addition to standard care vs standard care alone and is designed as a 2:1 randomized trial of 150 patients using Bayesian statistics. Endotoxic septic shock is a malignant form of sepsis https://www.youtube.com/watch?v=6RANrHHi9L8.
The trial methods are detailed in “Bayesian methods: a potential path forward for sepsis trials”.
Spectral is listed on the Toronto Stock Exchange under the symbol EDT. For more information, please visit www.spectraldx.com.
Forward-looking statement
Information in this news release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Implicit in this information, particularly in respect of the future outlook of Spectral and anticipated events or results, are assumptions based on beliefs of Spectral's senior management as well as information currently available to it. While these assumptions were considered reasonable by Spectral at the time of preparation, they may prove to be incorrect. Readers are cautioned that actual results are subject to a number of risks and uncertainties, including the availability of funds and resources to pursue R&D projects, the successful and timely completion of clinical studies, the ability of Spectral to take advantage of business opportunities in the biomedical industry, the granting of necessary approvals by regulatory authorities as well as general economic, market and business conditions, and could differ materially from what is currently expected.
The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this statement.
For further information, please contact:
Ali Mahdavi | Chris Seto | |
Capital Markets & Investor Relations | CEO | |
Spinnaker Capital Markets Inc. | Spectral Medical Inc. | |
416-962-3300 | ||
This email address is being protected from spambots. You need JavaScript enabled to view it. | This email address is being protected from spambots. You need JavaScript enabled to view it. |
Spectral Medical Inc. | ||||||
Condensed Interim Consolidated Statements of Financial Position | ||||||
In CAD (000s), except for share and per share data | ||||||
(Unaudited) | ||||||
June 30, | December 31, | |||||
Notes | 2024 | 2023 | ||||
$ | $ | |||||
Assets | ||||||
Current assets | ||||||
Cash | 7,536 | 2,952 | ||||
Trade and other receivables | 352 | 186 | ||||
Inventories | 272 | 366 | ||||
Prepayments and other assets | 932 | 621 | ||||
9,092 | 4,125 | |||||
Non-current assets | ||||||
Right-of-use-asset | 505 | 567 | ||||
Property and equipment | 294 | 326 | ||||
Intangible asset | 184 | 193 | ||||
Total assets | 10,075 | 5,211 | ||||
Liabilities | ||||||
Current liabilities | ||||||
Trade and other payables | 2,784 | 2,820 | ||||
Current portion of contract liabilities | 6 | 525 | 727 | |||
Current portion of lease liability | 125 | 121 | ||||
Notes payable | 7 | 334 | 264 | |||
Derivative Liability | 7 | 11,266 | 6,310 | |||
15,034 | 10,242 | |||||
Non-current liability | ||||||
Lease liability | 436 | 500 | ||||
Non-current portion of contract liabilities | 6 | 5,291 | 3,342 | |||
Notes payable | 7 | 12,157 | 7,676 | |||
Total liabilities | 32,918 | 21,760 | ||||
Shareholders' (deficiency) equity | 9 | |||||
Share capital | 88,501 | 87,061 | ||||
Contributed surplus | 8,916 | 8,916 | ||||
Share-based compensation | 11,091 | 10,385 | ||||
Warrants | 2,648 | 2,526 | ||||
Deficit | (133,999 | ) | (125,437 | ) | ||
Total shareholders' (deficiency) equity | (22,843 | ) | (16,549 | ) | ||
Total liabilities and shareholders' (deficiency) equity | 10,075 | 5,211 |
Spectral Medical Inc. | ||||||||||
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss | ||||||||||
In CAD (000s), except for share and per share data | ||||||||||
(Unaudited) | ||||||||||
Revised | Revised | |||||||||
(Refer Note 15) | (Refer Note 15) | |||||||||
Notes | Three months ended June 30, 2024 | Three months ended June 30, 2023 | Six-months ended June 30, 2024 | Six-months ended June 30, 2023 | ||||||
$ | $ | $ | ||||||||
Revenue | 6 | 471 | 306 | 1,139 | 836 | |||||
Expenses | ||||||||||
Raw materials and consumables used | 388 | 281 | 667 | 418 | ||||||
Salaries and benefits | 13 | 1,023 | 976 | 2,023 | 1,932 | |||||
Consulting and professional fees | 1,445 | 1,472 | 2,370 | 2,100 | ||||||
Regulatory and investor relations | 126 | 196 | 301 | 304 | ||||||
Travel and entertainment | 195 | 99 | 271 | 183 | ||||||
Facilities and communication | 143 | 81 | 263 | 164 | ||||||
Insurance | 105 | 100 | 210 | 187 | ||||||
Depreciation and amortization | 549 | 103 | 680 | 164 | ||||||
Interest expense | 7 | 668 | 250 | 1,208 | 497 | |||||
Foreign exchange loss | 65 | (201 | ) | 529 | (252 | ) | ||||
Share-based compensation | 9 | 1,079 | 987 | 1,256 | 961 | |||||
Other expense | - | (51 | ) | (12 | ) | (79 | ) | |||
Net loss on joint arrangement | 5 | - | 78 | - | 163 | |||||
Fair value adjustment derivative liabilities | 7 | (913 | ) | 223 | (68 | ) | (523 | ) | ||
4,873 | 4,594 | 9,698 | 6,219 | |||||||
Loss and comprehensive loss for the period from continuing operations | (4,402 | ) | (4,288 | ) | (8,559 | ) | (5,383 | ) | ||
Loss (gain) from discontinued operations | 5 | - | 49 | (3 | ) | 6 | ||||
Loss and comprehensive loss for the period | (4,402 | ) | (4,239 | ) | (8,562 | ) | (5,377 | ) | ||
Basic and diluted loss from continuing operations per common share | 10 | (0.02 | ) | (0.02 | ) | (0.03 | ) | (0.02 | ) | |
Basic and diluted loss from discontinued operations per common share | 10 | 0.00 | 0.00 | (0.00 | ) | 0.00 | ||||
Basic and diluted loss per common share | 10 | (0.02 | ) | (0.02 | ) | (0.03 | ) | (0.02 | ) | |
Weighted average number of common shares outstanding - basic and diluted | 10 | 280,049,434 | 278,556,560 | 279,539,697 | 278,552,206 |
Spectral Medical Inc. | |||||||||||||||
Condensed Interim Consolidated Statements of Changes in Shareholders’ Deficiency | |||||||||||||||
In CAD (000s) | |||||||||||||||
(Unaudited) | |||||||||||||||
Notes | Number of Shares | Share Capital | Contributed surplus | Share-based compensation | Warrants | Deficit | Total Shareholders’ (deficiency) equity | ||||||||
$ | $ | $ | $ | $ | $ | ||||||||||
Balance January 1, 2023 | 278,547,804 | 87,050 | 8,773 | 8,908 | 2,490 | (109,775 | ) | (2,554 | ) | ||||||
RSU released | 9 | 28,457 | 11 | - | (11 | ) | - | - | - | ||||||
Loss and comprehensive loss for the period | - | - | - | - | - | (5,377 | ) | (5,377 | ) | ||||||
Share-based compensation | - | - | - | 961 | - | - | 961 | ||||||||
Revised (Refer note 15) Balance, June 30, 2023 | 278,576,261 | 87,061 | 8,773 | 9,858 | 2,490 | (115,152 | ) | (6,970 | ) | ||||||
Warrants issued | - | - | - | - | 179 | - | 179 | ||||||||
Warrants expired | - | - | 143 | - | (143 | ) | - | - | |||||||
Loss and comprehensive loss for the period | - | - | - | - | - | (10,285 | ) | (10,285 | ) | ||||||
Share-based compensation | - | - | - | 527 | - | - | 527 | ||||||||
Balance December 31, 2023 | 278,576,261 | 87,061 | 8,916 | 10,385 | 2,526 | (125,437 | ) | (16,549 | ) | ||||||
Balance January 1, 2024 | 278,576,261 | 87,061 | 8,916 | 10,385 | 2,526 | (125,437 | ) | (16,549 | ) | ||||||
Warrants exercised | 750,000 | 463 | - | - | (90 | ) | - | 373 | |||||||
Warrants issued | - | (212 | ) | - | 212 | - | - | ||||||||
Share Options Exercised | 1,867,627 | 1,163 | - | (524 | ) | - | - | 639 | |||||||
RSU released | 51,651 | 26 | - | (26 | ) | - | - | - | |||||||
Loss and comprehensive loss for the period | - | - | - | - | - | (8,562 | ) | (8,562 | ) | ||||||
Share-based compensation | - | - | - | 1,256 | - | - | 1,256 | ||||||||
Balance June 30, 2024 | 281,245,539 | 88,501 | 8,916 | 11,091 | 2,648 | (133,999 | ) | (22,843 | ) |
Spectral Medical Inc. | |||||
Condensed Interim Consolidated Statements of Cash Flows | |||||
In CAD (000s) | |||||
(Unaudited) | |||||
Revised | |||||
(Refer note 15) | |||||
six months | six months | ||||
Notes | ended June 30, | ended June 30, | |||
2024 | 2023 | ||||
Cash flow provided by (used in) | |||||
Operating activities | |||||
Loss for the period | (8,562 | ) | (5,377 | ) | |
Adjustments for: | |||||
Depreciation on right-of-use asset | 62 | 47 | |||
Depreciation on property and equipment | 56 | 53 | |||
Amortization of intangible asset | 9 | 15 | |||
Amortization of deferred financing fee | 554 | 49 | |||
Unrealized foreign exchange gain/loss | 537 | (194 | ) | ||
Interest expense on lease liability | 17 | 19 | |||
Accreted interest on notes payable | 1,191 | 478 | |||
Share-based compensation expense | 1,256 | 961 | |||
Net loss on joint venture arrangement | - | 163 | |||
Fair value adjustment derivative liabilities | (68 | ) | (523 | ) | |
Changes in items of working capital: | |||||
Trade and other receivables | (166 | ) | 314 | ||
Inventories | 94 | 52 | |||
Prepayments and other assets | (311 | ) | (866 | ) | |
Trade and other payables | (36 | ) | (446 | ) | |
Contract liabilities | 1,747 | (333 | ) | ||
Net cash used in operating activities | (3,620 | ) | (5,588 | ) | |
Investing activities | |||||
Purchase of property and equipment | (24 | ) | (7 | ) | |
Net cash used in investing activities | (24 | ) | (7 | ) | |
Financing activities | |||||
Financing charges paid | (722 | ) | - | ||
Interest expense paid | (518 | ) | (235 | ) | |
Lease liability payments | (76 | ) | (63 | ) | |
Proceeds from share options exercised | 639 | - | |||
Proceeds from share warrants exercised | 373 | - | |||
Proceed from 9% convertible notes issued | 8,532 | - | |||
Net cash provided by financing activities | 8,228 | (298 | ) | ||
Change in cash | 4,584 | (5,893 | ) | ||
Cash, beginning of period | 2,952 | 8,414 | |||
Cash, end of period | 7,536 | 2,521 |
Last Trade: | C$0.59 |
Daily Volume: | 5,549 |
Market Cap: | C$165.940M |
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