Mr. James Howard-Tripp reports
GENENEWS ANNOUNCES Q4 2018 RESULTS AND PROVIDES PROGRESS UPDATE
GeneNews Ltd. has released operational and financial results for the three-month and 12-month periods ended Dec. 31, 2018. The company has provided a progress update on its business. All amounts are expressed in U.S. dollars, unless otherwise stated, and reported in accordance with international financial reporting standards.
James R. Howard-Tripp, chief executive officer of the company, commented: "Two thousand eighteen was an 'establishing momentum' year for us and we are excited about the business development initiatives we've been working on for two-plus years coming to successful conclusion in 2019. The most significant and exciting development during 2018 was the decision to return to our roots as a life sciences company and refocus our efforts on the validation and go-to-market strategy for our next-generation test, Aristotle."
Aristotle is built on the company's proven and proprietary Sentinel Principle technology platform and can test for 10 cancers from a single sample of blood. This is a high-impact market, with sales potential estimates of $17-billioon to $35-billion.
Aristotle has high sensitivity and specificity across these multiple cancers, and this same technology was validated in a 10,000-patient clinical trial. Aristotle has now been used in over 100,000 patients in North America to aid in the early detection of colorectal cancer.
During 2018, the company launched a business development initiative to target larger health systems that can work with high-risk populations and follow up with patients who have elevated test scores. The company has experienced early success with a Midwest hospital system that is utilizing all four blood-based cancer biomarker tests in three high-risk patient populations.
Another significant development in 2018 was building the partnerships and infrastructure required to support a patient-directed testing model. The company's business development team secured a national provider network and a robust blood draw network that includes a combination of more than 8,000 draw sites and mobile phlebotomists.
The company also strengthened efforts to market to concierge physicians whose practice models are more likely to attract patients who want to be pro-active about their health and are willing to participate in advanced biomarker testing for early cancer detection. These patients have more disposable income and are willing to pay out of their own pocket for these tests versus going through their insurance. It is this type of educated health care consumer that the company will be targeting for the new patient-directed testing model announced earlier this month.
"Although concierge practices are very much on our radar screen, small practices are anticipated to be only about 10 per cent of the company's volume," commented Mr. Howard-Tripp. "We anticipate that telehealth/patient-directed testing, screening of high-risk employees in self-funded employer health plans, and large health care system will each account for approximately 30 per cent of test volume and revenues in 2019."
Moving forward, a large part of the company's commercial strategy will focus on larger opportunities that can create high volumes of tests as well as generate direct revenue from immediate payment or flat-fee invoicing. Therefore, the company will increase its efforts to reach large, self-financed employers, 75 per cent of which cited high-cost claimants as one of the top drivers of rising health care. The No. 1 catastrophic claim for employers in 2018 was cancer. The CDC predicts that cancer will be the leading cause of death in the United States by 2020.
"Our four blood-based tests for early detection of colorectal, prostate, breast and lung cancer are leading the way to adoption of early diagnosis models. Imagine what Aristotle will do when we can leverage it into the commercial relationships we are building. This, we believe, will be in about two-year's time," commented Mr. Howard-Tripp. "We are excited about our future."
Q4 2018 financial results
For the three-month period ended Dec. 31, 2018, the company reported revenue of $70,000 and a consolidated net loss of $700,000, or three cents loss per common share, compared with revenue of $50,000 and a consolidated net loss of $400,000, or three cents loss per common share, for the three-month period ended Dec. 31, 2017. The $300,000 increased loss results from a $1.4-million impact of the change in fair value of notes payable, a $100,000 change in fair value of conversion liability and a $100,000 increase in finance costs, offset by $200,000 lower general and administrative expenses and $1.1-million revaluation of warrants.
During the fourth quarter of 2018, the company received financing to support the rollout into its four primary growth area initiatives, including: small independent practices, high-risk populations/employers, telemedicine and large health care systems.
Fiscal 2018 financial results
For the year ended Dec. 31, 2018, the company reported revenue of $200,000 and a consolidated net loss of $3.9-million, or three cents loss per common share, compared with revenue of $400,000 and a consolidated net loss of $2.9-million, or three cents loss per common share, for the year ended Dec. 31, 2017. The $1-million increased loss results from $200,000 of lower revenues, a $1.4-million impact of the change in fair value of notes payable, a $100,000 change in fair value of conversion liability and a $700,000 increase in finance costs, offset by $100,000 lower cost of goods sold, $900,000 lower general and administrative expenses, and $400,000 revaluation of warrants.
The company's financial statements and management's discussion and analysis are available on SEDAR.
About GeneNews Ltd.
GeneNews is dedicated to developing and commercializing innovative solutions for early cancer detection. The company's mission is to provide advanced diagnostics that can help physicians identify cancer in their patients at the earliest-possible stage, when it is the most curable.
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