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DiagnoCure Q4 Revenues Slide 59 Percent, Terminates Deal with Signal Genetics

NEW YORK (GenomeWeb News) – Cancer diagnostic development firm DiagnoCure said after the close of the market on Friday that its fiscal fourth-quarter revenues fell 59 percent year over year.

For the three months ended Oct. 31, the Quebec City, Quebec-based firm posted C$142,995 (US$145,306) in revenues, down from C$345,923 in Q4 2011. All revenues resulted from licensing agreements in the recently completed quarter, the firm said.

The year-over-year decline resulted from a loss of clinical sales to Signal Genetics in support of that firm's lung cancer testing R&D, a reduction in royalties related to Signal Genetics' Previstage GCC colorectal cancer test, and a loss of royalties from Scimedx related to cancer tests distributed under the names ImmunoCyt and uCyt+.

Gen-Probe, now part of Hologic, acquired the exclusive worldwide diagnostic rights to the PCA3 gene from DiagnoCure in late 2003, and in February the US Food and Drug Administration approved Gen-Probe's Progensa PCA3 assay for prostate cancer. DiagnoCure said on Friday that it received royalty revenues from Gen-Probe of C$137,097, compared to C$125,344 a year ago. Pursuant to an amendment with Gen-Probe in 2009, DiagnoCure also recorded a portion of the annual payment, or C$123,802, received from Gen-Probe during Q4 2011.

Operating expenses in the fourth quarter decreased 19 percent to C$2.1 million from C$2.6 million a year ago.

DiagnoCure's net loss from continuing operations in the period was C$2.0 million, or C$.05 per share, compared to a loss of C$2.3 million, or C$.06, a year ago.

In 2011 DiagnoCure and Signal Genetics signed a development and licensing agreement. DiagnoCure said on Friday that the agreement has been terminated and it has regained all commercial rights and control of the IP surrounding its GCC biomarker. It is released from all future obligations to Signal Genetics.

The two firms also have reached a settlement agreement of US$200,000, which takes into account "the inherent risks of litigation and the fact that DiagnoCure received US$6.2 million from the sale of its US laboratory and the development agreement," DiagnoCure said in a statement.

For Fiscal Year 2012, total revenues increased to C$2.5 million from C$1.2 million. DiagnoCure recorded C$1.2 million in revenues under research agreements in FY 2012, compared to none in 2011, while licensing revenues increased to a little more than C$1.2 million from a little less than C$1.2 million in FY 2011.

Royalty revenues from Gen-Probe shrank to C$587,615 from C$605,288 due primarily to softer sales in Europe, DiagnoCure said. The firm also recorded the full annual payment from Gen-Probe of C$626,401 in its fiscal second quarter, per the amended agreement with Gen-Probe.

Operating expenses dropped 5 percent to C$6.2 million from C$6.5 million a year ago, it said..

The firm narrowed its net loss to C$3.7 million, or $.09 per share, from C$5.3 million, or $.12 per share, a year ago.

DiagnoCure said it ended FY 2012 with C$5.8 million in cash, cash equivalents, temporary and long-term investments.