TORONTO, May 11 /PRNewswire-FirstCall/ -- Predictive medicine
company PreMD Inc. (TSX: PMD; Amex: PME) today announced results
for the first quarter of fiscal 2007 ended March 31, 2007 ("Q1
2007"). Recent Highlights - First full quarter since reacquiring
the rights to PREVU(x) from McNeil Consumer Healthcare; discussions
with potential marketing partners in advanced stages - Established
warehousing and distribution facilities through Lynden
International Logistics Co. to provide comprehensive logistics
management for PREVU(x) - Raised approximately $3.9 million in a
private placement with institutional investors to provide
additional working capital - Expanded the presence of PREVU(x) POC
within the retail pharmacy segment of the market - Data describing
PREVU(x) Tape POC was accepted for presentation at the American
Association for Clinical Chemistry Meeting to be held in July 2007;
this is the third product in the PREVU(x) line of skin cholesterol
tests and was created for point-of-contact or point-of- sale
opportunities - Results of PASA clinical study for PREVU(x) POC
were submitted for publication in the scientific literature -
Received comments from the U.S. Food and Drug Administration (FDA)
regarding the 510(k) application for PREVU(x) LT for use in the
life insurance industry. Responses are being prepared and a meeting
with the FDA is scheduled in the second quarter - Amended license
agreement for cancer patents at more favorable terms The
consolidated net loss for Q1 2007 was $1,589,000 or $(0.07) per
share compared with a loss of $2,374,000 or $(0.11) per share for
the quarter ended March 31, 2006 ("Q1 2006"), primarily due to a
decrease in clinical trial expenses and unrealized foreign exchange
gains on the revaluation of the convertible debentures. Total
product sales were $18,000 for Q1 2007 compared with $117 for Q1
2006. License revenue was nil for Q1 2007, compared to $77,000 for
Q1 2006. On March 28, 2007, the Company issued, by way of private
placement, 2,917,268 common shares and 1,458,634 common share
purchase warrants for gross proceeds of approximately $3.9 million.
Each common share purchase warrant expires in March 2010 and
entitles the holder to acquire one common share at a price of $1.66
per share. "This quarter marks the first full quarter since we have
reacquired the marketing rights to the PREVU(x) technology and I am
pleased with the tremendous progress we have made since the
transition," said Dr. Brent Norton, President and Chief Executive
Officer of PreMD. "One of our strategic objectives for the year is
to expand the market for PREVU(x), and to that end, important new
data has been analyzed and submitted for publication. In addition,
we are preparing our submission to the FDA to obtain an expanded
claim for PREVU(x) POC. Furthermore, we are preparing to meet with
the FDA regarding our 510(k) application for PREVU(x) LT. Both the
expanded claim for PREVU(x) POC and clearance of PREVU(x) LT would
provide us with additional market opportunities and great upside.
We have also engaged a leading logistics company, Lynden
International Logistics Co., to manage the PREVU(x) supply chain.
Our discussions with potential marketing partners are continuing
and I feel confident that we are taking the appropriate steps to
maximize the value of PREVU(x)." Dr. Norton continued, "in addition
to progress with PREVU(x), we continue to move forward in the
clinic with our cancer tests. The breast cancer test study at the
University of Louisville is expected to be completed by the end of
the second quarter and will then be submitted for publication.
Discussions with potential partners for our complete line of
oncology products also continue with the encouraging data we have
seen to date from the LungAlert(x) I-ELCAP study and the
ColorectAlert(x) EDRN study providing a strong basis for
discussion." Last month, PreMD received a letter from the American
Stock Exchange ("AMEX") stating that AMEX has determined that PreMD
is not in compliance with certain continued listing standards.
PreMD will be submitting a business plan, as requested, advising
AMEX of the action PreMD has taken, or will take, to bring it into
compliance with the relevant continued listing standards within a
maximum of 18 months. Outlook ------- "We are tracking quite nicely
to achieve our 2007 objectives and believe in our ability to
continue to execute on our strategic plan," said Dr. Norton. "We
continue to make progress in all aspects of our business,
positioning ourselves for future growth." PreMD's fiscal 2007
objectives include: - Expand the market and claims for PREVU(x) POC
- Enter into a marketing partnership for PREVU(x) - Achieve
regulatory clearance in the U.S. for PREVU(x) LT - Continue to
advance cancer clinical program - Conclude a strategic partnership
for the complete line of oncology products Financial Review
---------------- During Q1 2007, the Company focused on finalizing
the analysis of the data from the PASA skin cholesterol clinical
trial in preparation for a submission to the U.S. FDA and on
managing the cancer program. Most of the skin cholesterol clinical
trials were completed at the end of 2006. As a result, research and
development expenditures for the quarter decreased by $875,000 to
$641,000 from $1,516,000 in Q1 2006. The variance for the period
reflects: - a decrease of $957,000 in spending on clinical trials
for skin cholesterol, as well as the trials for ColorectAlert(x),
LungAlert(x) and our breast cancer test - an increase of $128,000
on product development in support of manufacturing validation for
the new cordless reader and for general product improvements; and -
a decrease of $54,000 in legal fees on intellectual property.
General and administration expenses amounted to $641,000 for Q1
2007 compared with $577,000 in Q1 2006, an increase of $64,000. The
increase for the quarter includes: - a decrease in stock-based
compensation, a non-cash expense, of $12,000 - an increase of
$43,000 in professional fees for legal, audit and human resources;
and - an increase of $18,000 in compensation expense. Interest on
convertible debentures (issued on August 30, 2005) amounted to
$164,000 and $166,000 for Q1 2007 and 2006, respectively. The
debentures bear interest at an annual rate of 7%, payable quarterly
in either cash or stock. Imputed interest of $248,000 and $231,000
in Q1 2007 and 2006 respectively, represents the expense related to
the accretion of the liability component, at an effective interest
rate of 12.75% plus the amortization of the deferred financing fees
which are being amortized over the four-year term of the
convertible debentures. Amortization expenses for capital assets
and intangible assets for Q1 2007 and 2006 amounted to $41,000 and
$44,000, respectively. The gain on foreign exchange was $84,000 for
Q1 2007, compared with a loss of $63,000 for Q1 2006. The major
contributing factor for the increase was the impact of foreign
exchange rates on the convertible debentures which are repayable in
U.S. dollars. Interest income amounted to $27,000 for Q1 2007
compared with $87,000 for Q1 2006 as a result of lower cash
balances. Refundable scientific investment tax credits ("ITCs")
accrued for Q1 2007 amounted to $22,000 versus $60,000 for Q1 2006.
This decrease was due to the reduced spending on clinical trials in
2007. Accounts payable at March 31, 2007 amounted to $198,000
compared with $964,000 at December 31, 2006. The large decrease
resulted from the payment of the year end outstanding invoices and
the reduced spending in 2007. As at March 31, 2007, PreMD had cash,
cash equivalents and short-term investments totaling $4,878,000
($3,276,000 as at December 31, 2006). The Company invests its funds
in short-term financial instruments and marketable securities. Cash
used to fund operating activities during Q1 2007 amounted to
$2,178,000 compared with $755,000 in Q1 2006, the increase
resulting from a reduction in accounts payable and accrued
liabilities. To date, the Company has financed its activities
through product sales, license revenues, the issuance of shares and
convertible debentures and the recovery of investment tax credits
(ITCs). Management believes that, based on historical cash
expenditures and the current expectation of further revenues from
product sales, royalties and license revenues, its existing cash
resources together with the proceeds of the private placement on
March 28, 2007 and the ITC receivable of $222,000 will be
sufficient to meet its current operating and capital requirements
through at least 2008. About PreMD Inc. PreMD Inc. is a leader in
predictive medicine, dedicated to developing rapid, non-invasive
tests for the early detection of life-threatening diseases. PreMD's
cardiovascular products are branded as PREVU(x) Skin Cholesterol
Test. The company's cancer tests include ColorectAlert(TM),
LungAlert(TM) and a breast cancer test. PreMD's head office is
located in Toronto, Ontario and its research and product
development facility is at McMaster University in Hamilton,
Ontario. For further information, please visit
http://www.premdinc.com/. For more information about PREVU(x),
please visit http://www.prevu.com/. This press release contains
forward-looking statements. These statements involve known and
unknown risks and uncertainties, which could cause the Company's
actual results to differ materially from those in the
forward-looking statements. Such risks and uncertainties include,
among others, the success of a plan for regaining compliance with
certain continued listing standards of the American Stock Exchange,
successful development or marketing of the Company's products, the
competitiveness of the Company's products if successfully
commercialized, the lack of operating profit and availability of
funds and resources to pursue R&D projects, the successful and
timely completion of clinical studies, product liability, reliance
on third-party manufacturers, the ability of the Company to take
advantage of business opportunities, uncertainties related to the
regulatory process, and general changes in economic conditions. In
addition, while the Company routinely obtains patents for its
products and technology, the protection offered by the Company's
patents and patent applications may be challenged, invalidated or
circumvented by our competitors and there can be no guarantee of
our ability to obtain or maintain patent protection for our
products or product candidates. Investors should consult the
Company's quarterly and annual filings with the Canadian and U.S.
securities commissions for additional information on risks and
uncertainties relating to the forward-looking statements. Investors
are cautioned not to rely on these forward-looking statements.
PreMD is providing this information as of the date of this press
release and does not undertake any obligation to update any
forward-looking statements contained in this press release as a
result of new information, future events or otherwise. (x)Trademark
PreMD Inc. Incorporated under the laws of Canada CONSOLIDATED
BALANCE SHEETS (In Canadian dollars) Unaudited As at As at March
31, December 31, 2007 2006 $ $
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ASSETS Current Cash and cash equivalents 3,533,734 112,577
Short-term investments 1,344,141 3,163,482 Accounts receivable
17,606 11,221 Inventory 174,198 179,219 Prepaid expenses and other
receivables 581,491 570,773 Investment tax credits receivable
222,000 200,000
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Total current assets 5,873,170 4,237,272
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Deferred financing fees, net of accumulated amortization of
$174,863 in 2006 - 347,589 Capital assets, net of accumulated
amortization of $863,880 (2006 - $841,611) 291,017 312,410
Intangible assets, net of accumulated amortization of $934,138
(2006 - $915,027) 363,118 382,229
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6,527,305 5,279,500
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LIABILITIES AND SHAREHOLDERS' DEFICIENCY Current Accounts payable
197,690 963,990 Accrued liabilities 712,884 932,372
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Total current liabilities 910,574 1,896,362
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Convertible debentures 6,167,413 6,350,680
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Total liabilities 7,077,987 8,247,042
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Shareholders' deficiency Capital stock 28,783,173 25,263,480
Contributed surplus 2,610,905 2,521,915 Equity component of
convertible debentures 2,239,385 2,239,385 Warrants 1,567,392
1,170,020 Deficit (35,751,537) (34,162,342)
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Total shareholders' deficiency (550,682) (2,967,542)
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6,527,305 5,279,500
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CONSOLIDATED STATEMENTS OF LOSS, COMPREHENSIVE LOSS AND DEFICIT (In
Canadian dollars) Unaudited Three months ended March 31, 2007 2006
$ $
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REVENUE Product sales 18,084 117 License revenue - 77,051
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18,084 77,168 Cost of product sales 4,846 128
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Gross profit 13,238 77,040
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EXPENSES Research and development 640,837 1,515,709 General and
administration 640,964 577,248 Interest on convertible debentures
163,583 165,514 Imputed interest on convertible debentures 248,346
231,412 Amortization 41,380 44,822 Loss (gain) on foreign exchange
(83,553) 62,632
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1,651,557 2,597,337
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RECOVERIES AND OTHER INCOME Investment tax credits 22,000 60,000
Interest 27,124 86,535
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49,124 146,535
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Net loss and comprehensive loss for the period (1,589,195)
(2,373,762) Deficit, beginning of period (34,162,342) (28,213,371)
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Deficit, end of period (35,751,537) (30,587,133)
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Basic and diluted loss per share $(0.07) $(0.11)
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Weighted average number of common shares outstanding 22,044,772
21,551,160
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CONSOLIDATED STATEMENTS OF CASH FLOWS (In Canadian dollars)
Unaudited Three months ended March 31, 2007 2006 $ $
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OPERATING ACTIVITIES Net loss for the period (1,589,195)
(2,373,762) Add (deduct) items not involving cash Amortization
41,380 44,822 Stock-based compensation costs included in: Research
and development expense 32,097 35,815 General and administration
expense 57,293 69,471 Imputed interest on convertible debentures
248,346 231,412 Interest on convertible debentures paid in common
shares 136,944 - Loss (gain) on foreign exchange (83,553) 62,632
Net change in non-cash working capital balances related to
operations (1,021,467) 1,251,788 Decrease in deferred revenue -
(76,725)
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Cash used in operating activities (2,178,155) (754,547)
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INVESTING ACTIVITIES Short-term investments 1,817,691 186,810 Sale
of capital assets 873 - Purchase of capital assets (1,749) (18,098)
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Cash provided by investing activities 1,816,815 168,712
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FINANCING ACTIVITIES Issuance of capital stock, net of issue costs
3,779,721 -
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Cash provided by financing activities 3,779,721 -
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Effect of exchange rate changes on cash and cash equivalents 2,776
42,067
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Net increase (decrease) in cash and cash equivalents during the
period 3,421,157 (543,768) Cash and cash equivalents, beginning of
period 112,577 773,199
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Cash and cash equivalents, end of period 3,533,734 229,431
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Represented by: Cash 133,732 229,431 Cash equivalents 3,400,002 -
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3,533,734 229,431
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Supplemental cash flow information Cash paid during the period for
interest 29,615 165,514
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DATASOURCE: PreMD Inc. CONTACT: Brent Norton, President and CEO,
Tel: (416) 222-3449 ext. 22, Email: ; Ron Hosking, Vice President
Finance and CFO, Tel: (416) 222-3449 ext. 24, Email: ; Rhonda
Chiger, Rx Communications Group, LLC, Tel: (917) 322-2569, Email:
Copyright