IsoRay reports increase revenue for 2010 fiscal year

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Sep 28 2010

IsoRay Inc. (AMEX: ISR) a medical isotope company and the exclusive manufacturer of Cesium-131 used in internal radiation therapy for the treatment of lung, colon, head and neck, and prostate cancers, ocular melanoma, and other malignant disease through the use of its proprietary radioisotope technology, announced its financial results for the year ended June 30, 2010.

Key Financial Metrics

In fiscal year 2010, 97% of revenue was generated from the sales of Proxcelan^TM Cesium-131 brachytherapy seeds for the treatment of prostate cancer while the other 3% of revenue was generated by sales of Proxcelan seeds for the treatments of lung, head and neck, ocular and colon cancer. Since the first implant in October 2004, over 5,000 patients have been treated with Proxcelan^TM Cesium-131 brachytherapy seeds for prostate alone with extraordinary results.

The Company had cash and cash equivalents of $1,678,869 as of June 30, 2010.

Dwight Babcock, IsoRay Chairman and CEO, commented, "We have completed our first phase of right-sizing the Company as we prepare for our future growth with sales increasing in the application of Cesium-131 for the treatment of various new cancer body sites. Our competitors in low dose rate brachytherapy treating prostate cancer only, experienced another year of declining annual sales of between 15%-25%. While the Company has yet to achieve its sales goals, IsoRay remains uniquely positioned as the brachytherapy isotope provider of choice due to the unique characteristics of Isoray's Cesium-131. Its high energy and short half-life remain important distinctions."

Babcock says the future holds great promise. "With our existing FDA approvals and established CMS codes, I believe we will see revenue growth from non-prostate applications and growing numbers of cases as we continue to execute our business plan and promote Cesium-131 brachytherapy for treatment of cancers throughout the body. Increasingly, we are hearing from leading physicians, worldwide, who are requesting Cesium-131 for patients who have an immediate need for treatment. These physicians are seeking out Cesium-131 as a solution to the management of challenging oncologic cases, which haven't had the benefit of an alternative like our isotope available to them in the past," he explained.

In the year ended June 30, 2010, the Company has seen dramatic improvements in the cost of product sales, gross margin, operating expenses, net loss and cash burn rate when compared to fiscal year 2009. We continue to evaluate several FDA-cleared devices that would expand the use of our proprietary isotope in both seed and liquid form to expand our reach. In addition, we are investigating other non-medical uses of our isotope. These non-medical uses will further help to ensure an expanding revenue base for IsoRay.

Major milestones achieved during the past fiscal year include several new product innovations and the continuation of manufacturing process improvements:

The Company acquired the exclusive worldwide distribution rights to the FDA-Cleared GliaSite® Balloon Catheter, the world's only device to deliver liquid radiation source therapy for brain cancer.
The world's first Cesium-131 implant for the treatment of colorectal cancer was performed at a world renowned medical institution in New York in line with IsoRay's strategic plan to expand the use of Cesium-131 in the treatment of cancers throughout the body.
Doctors at a prestigious medical institution performed the world's first Cesium-131 lung implants. To date, over twenty Cesium-131 lung implants have been performed.
Physicians at the University of Mississippi Medical Center performed the world's first head and neck permanent seed Cesium-131 implant for the treatment of recurrent head and neck cancer representing yet another breakthrough supporting our strategy to expand the use of Cesium-131 seeds to a larger population of patients with varying cancers. This momentous development points to the growing number of physicians who see the use of Cesium-131 as a very attractive alternative to other treatment options and further demonstrates physicians' continued growing use of Cesium-131 to broaden the scope of its applications.
Physicians at Curtis and Elizabeth Anderson Cancer Institute and WellSpan Health's York Cancer Center in Pennsylvania are now using Cesium-131 brachytherapy seeds for the treatment of lung cancer providing further evidence of the growing number of institutions using Cesium-131.
IsoRay successfully shipped the first set of Cesium-131 brachytherapy seeds to a Canadian customer for the purpose of furthering research and development of Cesium-131 in Canada. Cesium-131 is currently approved by Health Canada for the treatment of low-risk prostate cancers.
IsoRay made several proposals for non-medical use of Cesium-131 in support of Homeland Security's Transportation Security Administration. We had an inaugural sale from this effort and await responses to other projects we have proposed.
The Company reached a significant landmark in October 2009 as the first prostate patients implanted with the Proxcelan Cesium-131 brachytherapy seed in October 2004 reached their 5^th year anniversary allowing IsoRay to begin publishing 5-year clinical results.
The Company continued to diversify its core business by adding new treatment options for physicians to treat difficult cancer cases. The Company increased the revenue generated from new treatment sites to approximately 3% in fiscal year 2010 and in the 4th quarter of fiscal year 2010, revenue from new cancer sites other than prostate grew to approximately 5% of the total revenue for the quarter.
The Company continued to substantially reduce the cash burn rate from operating activities achieving a 29% reduction despite expenses related to our new development projects.
The Company observed increased exposure of Cesium-131 in publications and presentations.
- There were eight presentations made at the American Brachytherapy Society in calendar year 2010.
- Five publications were abstracted to the MEDLINE database of citations of the medical literature that reported patients treated with Cesium-131 for prostate cancer.
- Five additional publications mentioned Cesium-131 as an accepted treatment for prostate cancer, and two publications specifically discussed the physics and dosimetric profile of Cesium-131 for the treatment of prostate and eye cancers.