IMI announces third quarter results TORONTO, Nov. 11
/PRNewswire-FirstCall/ -- IMI International Medical Innovations
Inc. (TSX:IMI; Amex: IME), a leader in predictive medicine, today
announced financial results for the third quarter of fiscal 2004
ended September 30, 2004 (Q3 2004). "IMI is making solid progress
on all of our business plan objectives," said Dr. Brent Norton,
President and Chief Executive Officer. "We are continuing to
publish and present key findings, most recently at the Canadian
Cardiovascular Congress, which strengthens the scientific
credibility of our products while raising our profile with the
medical community. Additionally, a new paper on our skin sterol
technology has just been accepted by the Journal of Clinical
Chemistry for publication in January 2005." Dr. Norton continued,
"During the quarter we worked closely with McNeil to brand our
cardiovascular products as PREVU(x) Skin Sterol Test, a complex
process that ranged from software enhancements to extended dating
on the test kits. Moreover, we shipped additional product to McNeil
subsequent to quarter end." "IMI is building a world class
portfolio of predictive medicine technologies," Dr. Norton said.
"Our recent bid to acquire IBEX Technologies Inc. reflects our
growth focus and will help position IMI to be a significant force
in the North American biotech industry and globally, with products
that address urgent health needs. We believe our offer, which
enables IBEX shareholders to unlock the full value of their
company's assets, will result in an even stronger, more dynamic
predictive medicine company and increased shareholder value."
Recent Highlights ----------------- Publications and Presentations
New findings presented at the Canadian Cardiovascular Congress on
October 25, 2004 confirmed that skin sterol provides new
information about heart disease risk in patients on statin drug
therapy independent of traditional risk factors. Additionally, this
trial provided important new data about skin sterol levels, which
were higher in patients with a history of stroke, angina and
diabetes. Conversely, blood markers did not positively correlate
with prior stroke, angina or diabetes. During the quarter positive
study results for IMI's breast cancer test were published in the
prestigious journal Cancer. The data showed that IMI's test
demonstrated a statistically significant difference between
early-stage breast cancer and non-cancerous samples, which
demonstrates the test's effectiveness in identifying early-stage
disease. PREVU(x) Skin Sterol Test McNeil Consumer Healthcare
continues its commercialization process, forming plans for the
international build-out of PREVU(x) as well as ongoing marketing
and sales initiatives this fall and through 2005. McNeil has
exhibited at several major medical conferences, including the
Canadian Cardiovascular Congress and the American Heart Association
annual conference as the planned rollout of the product begins to
the professional medical community. McNeil's educational
newsletter, titled Prediction and Prevention: New Perspectives in
Cardiovascular Disease Risk, has recently been made available on
IMI's website. Patents In August 2004, IMI learned that two of its
U.S. skin sterol patents had been listed as abandoned by the United
States Patent and Trademark Office (PTO) for failure to pay
maintenance fees. The failure to pay these fees appears to have
occurred while management of the files was being transferred
between two separate patent agents. IMI and its agents have filed a
petition with the PTO for reinstatement of the patents, which is a
process that could take several months. Investor Relations
Activities IMI is continuing to broaden its relationships with the
professional investment community in Canada as well as the United
States, where the company has engaged The Investor Relations Group
(IRG). IRG is increasing investor awareness of IMI by individually
and personally introducing IMI and its management to pre-qualified
fund managers and analysts. IRG is also working to increase public
awareness of IMI through media placement in television, radio,
magazine, newspaper and trade media outlets. Financial Review
---------------- For the three months ended September 30, 2004 (Q3
2004), IMI reported a net loss of $1,203,000 or $0.06 per share
compared with a loss of $992,174 or $0.05 per share for the quarter
ended September 30, 2003 (Q3 2003). For the nine months ended
September 30, 2004, IMI reported a net loss of $3,765,000 or $0.18
per share, compared with $2,636,000 or $0.13 per share for the nine
months ended September 30, 2003. In Q2 2004, IMI made its first
sales of product to its marketing partner, McNeil Consumer
Healthcare. IMI reported no product sales of its skin sterol tests
during Q3 2004, however additional product was shipped to McNeil
subsequent to quarter end. As reported in Q2 2004, IMI completed a
worldwide licensing agreement with McNeil to sell the company's
cardiovascular products, which have been branded as PREVU(x) Skin
Sterol Test. The upfront cash payments from both the original
Canadian agreement and the worldwide agreement have been deferred
and are being recognized into income on a straight-line basis over
the relative terms of the agreements. Therefore, $76,725 has been
reported as license revenue for Q3 2004 compared with $1,725 in Q3
2003. At September 30, 2004 IMI had cash, cash equivalents and
short-term investments totaling $6,116,000 ($6,697,000 as at
December 31, 2003). Management believes that, based on historic
burn rates and the current expectation of revenues from partnering
activities and product sales, the company's cash resources,
together with investment tax credits receivable, are sufficient to
meet current operating and capital requirements through at least
2005. Research and development expenditures for the quarter
increased by $68,000 to $525,000 from $457,000 in Q3 2003. The
variance for the quarter reflects: - A $33,000 increase in spending
on clinical trials for skin sterol and cancer to $107,000 from
$74,000 during fiscal 2003. This increase is related to a lung
cancer trial that commenced in the latter part of 2003. IMI
currently has 17 clinical trials ongoing. - Increased filing fees
on intellectual property, which amounted to $74,000 compared with
$17,000 in fiscal 2003. During the quarter IMI filed new patents on
skin sterol in numerous European countries. - Subcontract research
increased by $11,000 as IMI continued to develop new prototypes of
the skin sterol technology. - Stock-based compensation, which was
prospectively adopted in 2003, resulted in non-cash expenses for
research of $23,000 in Q3 2004 compared with $22,000 for Q3 2003.
Other development costs remained at fairly constant levels during
the period. Total research expenditures for the nine months ended
September 30, 2004 and 2003 amounted to $1,872,000 and $1,154,000,
respectively. General and administration expenses for the quarter
increased by $267,000 to $791,000 from $524,000 in Q3 2003. The
variance for the quarter reflects: - Stock-based compensation for
options granted for administration resulted in a non-cash expense
of $286,000 for the quarter compared with $3,000 for Q3 2003. This
increase was primarily for options granted in Q3 that vest over 12
months pursuant to a consulting contract. It also reflects the
cashless exercise of options that were granted prior to the January
1, 2003 adoption of the policy for expensing the fair value of
options. - A $21,000 increase in professional fees, primarily due
to legal fees related to finalizing the global licensing agreement.
- A $21,000 increase in insurance over Q3 2003. This primarily
reflects IMI's decision to increase its liability insurance
coverage following the September 2003 U.S. listing on the American
Stock Exchange. However, Q3 2004 U.S. listing costs were nil
compared with $61,000 in Q3 2003. - Annual report, annual meeting
and investor relations expenses were higher by $40,000 as a result
of additional expenses to improve shareholder communications. -
Directors' fees were lower by $17,000 during the quarter compared
with Q3 2003 but were comparable for the nine-month periods. The
difference is due to the timing of the meetings in 2003. Total
general and administration expenses for the nine months ended
September 30, 2004 and 2003 amounted to $2,078,000 and $1,637,000,
respectively. Amortization expenses for equipment and acquired
technology for the three months and nine months ended September 30,
2004 amounted to $51,000 and $177,000, respectively. (The
nine-month amount comprises $6,000 that was included as an overhead
allocation in cost of sales.) This is a decrease of $68,000 and
$35,000, respectively, over the corresponding periods in 2003. In
Q3 2003, there was a large purchase of equipment that resulted in
the extraordinary amortization charge for that quarter. Purchases
of equipment to support clinical trials and manufacturing amounted
to $16,000 and $167,000 for the three and nine months ended
September 30, 2004, respectively. Interest income amounted to
$32,000 for the quarter, compared with $48,000 for Q3 2003,
reflecting 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 third quarter results on Friday, November 12,
2004 at 10 a.m. ET. To listen to the call, please dial 416-640-4127
or 1-800-814-4853, or visit http://www.imimedical.com/. A
rebroadcast of the call will be available until November 19, 2004.
Please dial 416-640-1917 or 1-877-289-8525 and enter the passcode
21101081 followed by the number sign. 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) Skin Sterol Test, 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 press release contains
forward-looking statements. These statements involve known and
unknown risks and uncertainties, which could cause IMI's actual
results to differ materially from those in the forward-looking
statements. Such risks and uncertainties include, among others, the
lack of operating profit and availability of funds and resources to
pursue R&D projects, the successful and timely completion of
clinical studies, the successful development or marketing of IMI's
products, reliance on third-party manufacturers, the
competitiveness of IMI's products if successfully commercialized,
the ability of IMI to take advantage of business opportunities,
uncertainties related to the regulatory process, and general
changes in economic conditions. In addition, while IMI 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. The
following factors related to the business combination of IMI and
IBEX could cause actual results to differ materially from the
forward-looking statements: lack of Shareholder support for the
Offer; the timing of the closing of the transaction, if approved by
Shareholders; dilution; the businesses of IMI and IBEX may suffer
due to uncertainty prior to completion of the transaction; the
business of IMI and IBEX may not be integrated successfully or such
integration may be more difficult, time-consuming or costly than
expected; changes in management and organizational structure; and
the expected combination benefits from the IMI/IBEX transaction may
not be fully realized nor realized within the expected time frame.
Investors should consult IMI'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. IMI 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. Financial statements are attached to this release. The
company's complete third quarter report is available on IMI's
website.
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IMI International Medical Innovations Inc. Incorporated under the
laws of Canada
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Consolidated Balance Sheets (in Canadian Dollars) (Unaudited) As at
September 30, 2004 and December 31, 2003 September 30 December 31
2004 2003
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ASSETS Current Cash and cash equivalents $ 1,169,612 $ 61,625
Short-term investments 4,946,356 6,635,135 Prepaid expenses and
other receivables 186,873 340,489 Investment tax credits receivable
335,000 180,000
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Total current assets 6,637,841 7,217,249
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Capital assets, net of accumulated amortization of $557,781 (2003 -
$448,182) 460,158 403,205 Acquired technology, net of accumulated
amortization of $761,719 (2003 - $693,684) 385,538 453,573
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$ 7,483,537 $ 8,074,027
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LIABILITIES AND SHAREHOLDERS' EQUITY Current Accounts payable $
73,340 $ 139,435 Accrued liabilities 253,270 403,213
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Total current liabilities 326,610 542,648
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Deferred revenue 2,987,925 93,100
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Total liabilities 3,314,535 635,748
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Shareholders' equity Capital stock 25,384,843 24,780,846 Warrants
204,200 312,200 Deficit (21,420,041) (17,654,767)
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Total shareholders' equity 4,169,002 7,438,279
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$ 7,483,537 $ 8,074,027
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IMI International Medical Innovations Inc.
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Consolidated Statements of Loss and Deficit (Unaudited) Three
months ended Nine months ended September 30 September 30 2004 2003
2004 2003
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REVENUE Product sales $ - $ - $ 100,000 $ - License revenue 76,725
1,725 105,175 5,175
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76,725 1,725 205,175 5,175 Cost of sales - - 93,464 -
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Gross profit 76,725 1,725 111,711 5,175
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EXPENSES Research and development 524,634 456,633 1,872,136
1,154,112 General and administration 790,805 524,109 2,077,508
1,636,957 Amortization 50,743 118,174 171,034 205,575
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1,366,182 1,098,916 4,120,678 2,996,644
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RECOVERIES AND OTHER INCOME Investment tax credits 55,000 56,634
155,000 172,217 Interest 31,549 48,383 88,693 183,342
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86,549 105,017 243,693 355,559
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Net loss for the period (1,202,908) (992,174) (3,765,274)
(2,635,910) Deficit, beginning of period (20,217,133) (15,235,792)
(17,654,767) (13,592,056)
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Deficit, end of period $(21,420,041) $(16,227,966) $(21,420,041)
$(16,227,966)
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Basic and diluted loss per share $ (0.06) $ (0.05) $ (0.18) $
(0.13)
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Weighted average number of common shares outstanding 21,270,199
20,924,582 21,265,760 20,884,113
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IMI International Medical Innovations Inc.
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Consolidated Statements of Cash Flows (Unaudited) Three months
ended Nine months ended September 30 September 30 2004 2003 2004
2003
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OPERATING ACTIVITIES Net loss for the period $ (1,202,908) $
(992,174) $ (3,765,274) $ (2,635,910) Add items not involving cash
Amortization 50,743 118,174 177,634 205,575 Stock compensation
costs included in: Research and development expense 23,391 21,507
99,460 25,673 General and administrative expense 293,425 3,424
378,569 24,694 Loss on sale of capital asset - - - 5,230
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(835,349) (849,069) (3,109,611) (2,374,738) Net change in non-cash
working capital balances related to operations (150,007) 93,403
(222,822) 876 Increase (decrease) in deferred revenue (76,725)
(1,725) 2,894,825 (5,175)
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Cash used in operating activities (1,062,081) (757,391) (437,608)
(2,379,037)
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INVESTING ACTIVITIES Short term investments (9,587) 704,168
1,688,779 2,156,933 Purchase of capital assets (15,895) (102,412)
(166,552) (133,844)
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Cash provided by (used in) investing activities (25,482) 601,756
1,522,227 2,023,089
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FINANCING ACTIVITIES Issuance of capital stock, net - 73,437 23,368
216,437
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Cash provided by financing activities - 73,437 23,368 216,437
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Net increase (decrease) in cash and cash equivalents during the
period (1,087,563) (82,198) 1,107,987 (139,511) Cash and cash
equivalents - Beginning of period 2,257,175 93,138 61,625 150,451
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- End of period $ 1,169,612 $ 10,940 $ 1,169,612 $ 10,940
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Represented by Cash $ 76,962 $ 10,940 $ 76,962 $ 10,940 Cash
equivalents 1,092,650 - 1,092,650 -
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$ 1,169,612 $ 10,940 $ 1,169,612 $ 10,940
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DATASOURCE: IMI International Medical Innovations Inc. CONTACT:
Company Contacts: Sarah Borg-Olivier, Director, Communications,
(416) 222-3449, ; Ron Hosking, Vice President, Finance and CFO,
(416) 222-3449, ; U.S. Investor Contact: John Nesbett, The Investor
Relations Group, (212) 825-3210,
Copyright