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DiagnoCure Posts Sharp Q3 Revenue Increase; Warns It May Not Receive Payment for Services Rendered

NEW YORK (GenomeWeb News) – DiagnoCure's fiscal third-quarter revenues increased 143 percent year over year, the Quebec City-based cancer diagnostic firm reported after the close of the market on Thursday.

For the three months ended July 31, revenues totaled C$709,754 (US$722,057), compared to C$292,073 a year ago. Revenues from royalty payments slipped to C$142,102 from C$168,273 a year ago as revenues from Gen-Probe, now part of Hologic, decreased to C$136,843 from C$155,024 a year ago as austerity measures in Europe resulted in softness the region, DiagnoCure said.

Gen-Probe 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.

Royalty revenues from Scimedx for cancer tests distributed under the names ImmunoCyt and uCyt+ also shrank, to C$5,259 from C$13,248 a year ago.

During the quarter, DiagnoCure said that it provided services to a subsidiary of Signal Genetics related to the Previstage TMGCC Colorectal Cancer staging test in the amount of C$567,652 for a total in accounts receivables of C$707,012. It has been told, however, that Signal Genetics closed its laboratory in Pennsylvania on July 31 and is no longer running the Previstage test.

As of July 31, Signal Genetics has not made royalty payments required for the second quarter, and there is no assurance that Signal Genetics will pay DiagnoCure any money owed under the two firms' R&D agreement or any royalties, DiagnoCure said.

DiagnoCure recorded no revenues from Gen-Probe's Progensa test in the third quarter of 2012, compared to C$123,801 a year ago. Under an amended agreement between the two companies, an FDA submission milestone is to be paid on Jan. 31 of each year until the milestone is reached. Because the Progensa assay was approved, all the conditions of the amendment were met, and DiagnoCure recorded the full 2012 payment as revenues during Q2 2012.

During the recently completed quarter, R&D costs increased to C$755,819 from C$568,697 a year ago due to services provided in relation to the Previstage test. Its SG&A expenses dropped to C$584,314 from C$625,018.

DiagnoCure said that net loss from continued operations for the quarter narrowed to C$606,049, or $.01 per share, compared to a net loss of C$892,216, or $.03 per share, a year ago.

The company exited the quarter with C$6.5 million in cash, cash equivalents, and temporary and long-term investments.