Financial results for third-quarter 2009 announced by Spectral Diagnostics

Spectral Diagnostics Inc.Nov 12 2009

Spectral Diagnostics Inc., (TSX: SDI) today announced its financial results for the third quarter ended September 30, 2009.

"During the quarter, the Company's primary focus was on the U.S. regulatory strategy and commercialization of Toraymyxin(TM) as an effective treatment for severe sepsis. We completed the protocol design for a clinical trial and we are evaluating a number of strategic and financial options that would allow us to start the trial in the first half of 2010," said Dr. Paul Walker, President and CEO of Spectral. "We strongly believe that the Toraymyxin(TM), when used together with our proprietary Endotoxin Activity Assay (EAA(TM)), has the potential to fulfill a significant unmet need for the approximately 125,000 patients who develop severe sepsis or septic shock in the U.S. each year."

Financial Review

For the third quarter ended September 30, 2009, Spectral reported revenues of $815,000, compared to $701,000 for the corresponding period in 2008. For the nine months ended September 30, 2009, revenues were $2,433,000 compared to $2,150,000 for the same 2008 period. Sales of the EAA(TM) diagnostic increased, while royalty and reagent revenues from the Company's proprietary Troponin I products remained consistent with prior year levels.

Operating expenses for the third quarter ended September 30, 2009 were $999,000, compared to $887,000 for the corresponding period in 2008. For the nine months ended September 30, 2009, operating expenses were $3,228,000 compared to $2,841,000 in the same 2008 period. The increase in operating expenses in the first half of the year was entirely due to incremental consulting costs related to the development of the clinical and regulatory pathway for Toraymyxin(TM) and the foreign exchange impact of a rising Canadian dollar against the U.S. currency. Operating expenses related to the existing business remained consistent with prior year levels.

For the third quarter ended September 30, 2009, the Company reported a loss of $429,000 or ($0.01) per share, compared to a loss of $332,000 or ($0.01) per share for the corresponding period in 2008. The third quarter loss included the above-mentioned consulting costs and foreign exchange loss, totaling $128,000. For the nine months ended September 30, 2009, the Company reported a loss of $1,534,000 or ($0.06) per share, compared to a loss of $1,199,000 or ($0.05) per share for the corresponding period in 2008. The year to date loss included the above-mentioned consulting costs and foreign exchange loss, totaling $444,000.

Cash and short term investments as at September 30, 2009 totaled $3,122,000, compared to $4,297,000 as at December 31, 2008. Management expects that the Company will maintain a cash and short term investment balance of approximately $3,000,000 for the rest of 2009.