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Precision Therapeutics Reports Second Quarter 2018 Financial Results
Helomics Holding Corporation, predicted to generate approximately $3.2 million in revenues by the end of 2018
MINNEAPOLIS, Aug. 14, 2018 (GLOBE NEWSWIRE) -- Precision Therapeutics Inc. (NASDAQ: AIPT) (“Precision” or “the Company”), a company focused on applying artificial intelligence to personalized medicine and drug discovery, announced today financial results for the three and six months ended June 30, 2018 and provided a business update.
Highlights of the second quarter of 2018 and recent weeks include:
- Signed a definitive merger agreement with Helomics Holding Corporation (“Helomics”). Upon completion of the merger, Precision will increase its equity stake in Helomics from 25% to 100%.
— Helomics is predicted to generate approximately $3.2 million in revenues by the end of 2018.
- Helomics launched its new Precision Oncology Insights platform. This unique platform, tests the patient’s own tumor, providing additional context (a roadmap) to help the oncologist personalize the treatment for their patients. The initial focus is on gynecologic cancers, especially ovarian.
- Helomics announced the commercial launch of the ‘HelomicsDiscover’ program to drive forward the discovery of the next generation of precision cancer therapies in partnership with Pharma and Diagnostic companies.
- Launch of new website www.precisiontherapeutics.com to offer a more comprehensive understanding of the Company's new value proposition and strategic direction in the precision oncology industry.
Highlights from Skyline Medical, a division of Precision Therapeutics:
- Sold nine STREAMWAY Systems in the second quarter of 2018, compared with no STREAMWAY Systems in Q2 2017, bringing the total number of STREAMWAY Systems sold to 132 as of June 30, 2o18
- On July 11, 2018, the European Patent Office (“EPO”) granted European Patent No. 2948200, covering the Company’s STREAMWAY® System.
Dr. Carl Schwartz, Chief Executive Officer of Precision, commented, “We recently advanced our strategy to penetrate the fast-growing precision oncology market by signing a definitive merger agreement with Helomics which, when completed, will allow us to increase our equity stake in Helomics from 25% to 100%. Helomics’ cutting-edge precision oncology solutions not only drive improved outcomes for cancer patients by helping clinicians personalize treatments but are also integral to the development of new precision therapies through its integrated Contract Research Organization (‘CRO’) business. What makes these solutions superior to others on the market, is their ability to leverage Helomics’ proprietary D-CHIP (‘Digital Clinical Health Insights Platform’), an artificial intelligence powered bioinformatics engine that provides actionable insights from patient data to drive improvements in both the effectiveness of current cancer treatments and the discovery of new treatments.
Dr. Schwartz continued, “Over the past several weeks, we have worked closely with Helomics as it transforms its business model into one that not only utilizes this one-of-a-kind offering but is also supported by more sustainable revenue streams. Rather than relying upon unreliable reimbursement policies for the specific tests it conducts, like a traditional diagnostics company does, Helomics has repositioned itself as a precision medicine business - using artificial intelligence and its comprehensive disease database to provide ‘roadmaps’ that help the oncologist guide therapy for the patient and improve outcomes. We believe this new precision medicine business model which provides for a more consistent billing approach will benefit payors and patients, while improving revenue consistency.
“Looking ahead to the second half of the year, we expect Helomics to generate additional revenues from its CRO services business. Most importantly, Helomics is launching its D-CHIP offering for pharma companies, which should drive both project-based revenue and subscription payments. This development is critical, as it will provide revenue growth and stability for many years to come. Moreover, as Helomics’ specimen volumes grow, so too does the number of tumor profiles that are available to the D-CHIP platform. This increases Helomics’ value, and also helps create a more effective platform to improve treatment options for the patients of tomorrow. As we look to the second half of 2018, we expect Helomics to significantly ramp revenues from its CRO, precision oncology insights and D-CHIP solutions.
“In the Skyline Medical division, we continued to focus our efforts on growing sales of the STREAMWAY System, resulting in nine units sold in the second quarter and a further two sold subsequent to the quarter end. All of these sales were to hospitals and medical centers in the United States. We expect STREAMWAY sales to be heavily weighted toward the second half of the year. We are currently ramping our commercialization efforts internationally, with an initial focus on the European market. In July, we were pleased to be granted a European patent for the STREAMWAY System. This will help protect our competitive positioning in the market, and also validates the system’s ‘one-of-a-kind’ value proposition,” concluded Dr. Schwartz.
Revenue for the three months ended June 30, 2018 was $358,586, compared with $106,822 for the three months ended June 30, 2017. Revenue was derived from the sales of nine STREAMWAY Systems and the sale of STREAMWAY disposable products during the second quarter of 2018.
Gross profit for the three months ended June 30, 2018 was $249,616 or 69.6% of revenue, compared with $84,812 or 79.4% of revenue for the same period in 2017.
Total operating expenses for the three months ended June 30, 2018 were $1.7 million, compared with $2.6 million for the three months ended June 30, 2017. The decrease was primarily the result of lower general and administrative expenses associated with investors stock compensation that was recorded in 2017 due to a registered direct offering in November 2016 with warrants that vested in 2017.
The Company also reported a $960,508 loss related to the Company’s 25% equity method investment in Helomics, for the three-month period.
Comprehensive loss for the three months ended June 30, 2018, which includes this loss on equity method investment, was $2.4 million or a loss of $0.20 per share. This compares with comprehensive loss for the three months ended June 30, 2017 of $2.5 million or a loss of $0.41 per share.
Revenue for the six months ended June 30, 2018 was $770,179, compared with $281,988 for the six months ended June 30, 2017. Revenue was derived from the sales of 25 STREAMWAY Systems and the sale of STREAMWAY disposable products during the first half of 2018.
Gross profit for the six months ended June 30, 2018 was $543,865 or 69.6% of revenue, compared with $222,985 or 79.4% of revenue for the same period in 2017.
Total operating expenses for the six months ended June 30, 2018 were $3.7 million, compared with $4.1 million for the six months ended June 30, 2017. The decrease was primarily the result of lower General and administrative expenses associated with investors stock compensation that was recorded in 2017 due to a registered direct offering in November 2016 with warrants that vested in 2017.
The Company also reported a $960,508 loss related to the Company’s equity method investment in Helomics, for the six-month period.
Comprehensive loss for the six months ended June 30, 2018, which includes this loss on equity method investment, was $4.1 million or a loss of $0.36 per share. This compares with a comprehensive loss for the six months ended June 30, 2017 of $3.9 million or a loss of $0.62 per share.
The Company had cash, cash equivalents and marketable securities of $1 million as of June 30, 2018, compared with $766,189 as of December 31, 2017.
Conference Call and Webcast
Management will also hold a conference call to provide a general business update and discuss upcoming milestones. The conference call is scheduled to begin today at 4:30 p.m. Eastern Time. A webcast of the event will be available via the ‘Investor Info’ section of the Company’s website at http://www.precisiontherapeutics.com/.
To access the conference call, U.S.-based listeners should dial +1 (866) 548-4713 and international listeners should dial +1 (323) 794-2093. All listeners should provide the following passcode: 5618301.
A dial-in replay of the call will also be available to those interested until August 28, 2018. To access the replay, dial +1 (844) 512-2921 (United States) or +1 (412) 317-6671 (International) and enter replay pin number: 5618301.
To be added to the Precision Therapeutics’ database, please email Info@MoneyInfo-llc.com with your email address. This is solely for the use of Precision Therapeutics and will not be sold or distributed to third parties.
About Precision Therapeutics Inc.
Precision Therapeutics (NASDAQ:AIPT) operates in two business areas: first, applying artificial intelligence to personalized medicine and drug discovery to provide personalized medicine solutions for patients and clinicians as well as clients in the pharmaceutical, diagnostic, and biotech industries, and second, production of the FDA-approved STREAMWAY® System for automated, direct-to-drain medical fluid disposal. For additional information, please visit www.precisiontherapeutics.com.
Precision Therapeutics’ medicine business is committed to improving the effectiveness of cancer therapy using the power of artificial intelligence (AI) applied to rich data diseases databases. This business has launched with Precision Therapeutics' investment in Helomics Corporation, a precision medicine company and integrated clinical contract research organization whose mission is to improve patient care by partnering with pharmaceutical, diagnostic, and academic organizations to bring innovative clinical products and technologies to the marketplace. In addition to its proprietary precision diagnostics for oncology, Helomics offers boutique CRO services that leverage their patient-derived tumor models, coupled to a wide range of multi-omics assays (genomics, proteomics and biochemical), and a proprietary bioinformatics platform (D-CHIP) to provide a tailored solution to our client's specific needs. Helomics is currently 25% owned by Precision Therapeutics. Helomics® is headquartered in Pittsburgh, Pennsylvania where the company maintains state-of-the-art, CLIA-certified, clinical and research laboratories. For more information, please visit www.Helomics.com.
Precision Therapeutics has also announced the formation of a subsidiary, TumorGenesis to pursue a new rapid approach to growing tumors in the laboratory, which essentially “fools” the cancer cells into thinking they are still growing inside the patient. Precision Therapeutics and Helomics have also announced a proposed joint venture with GLG Pharma focused on using their combined technologies to bring personalized medicines and testing to ovarian and breast cancer patients, especially those who present with ascites fluid (over one-third of patients). The growth strategy in this business includes securing new partnerships and considering acquisitions in the precision medicine space.
Sold through the Skyline Medical business of Precision Therapeutics, The STREAMWAY System virtually eliminates staff exposure to blood, irrigation fluid and other potentially infectious fluids found in the healthcare environment. Antiquated manual fluid handling methods that require hand carrying and emptying filled fluid canisters present an exposure risk and potential liability. Skyline Medical's STREAMWAY System fully automates the collection, measurement, and disposal of waste fluids and is designed to: 1) reduce overhead costs to hospitals and surgical centers; 2) improve compliance with OSHA and other regulatory agency safety guidelines; 3) improve efficiency in the operating room, and radiology and endoscopy departments, thereby leading to greater profitability; and 4) provide greater environmental stewardship by helping to eliminate the approximately 50 million potentially disease-infected canisters that go into landfills each year in the U.S. For additional information, please visit www.skylinemedical.com.
Certain of the matters discussed in this announcement contain forward-looking statements that involve material risks to and uncertainties in the Company's business that may cause actual results to differ materially from those anticipated by the statements made herein. Such risks and uncertainties include (1) risks related to the proposed merger with Helomics, including the fact that we may not complete the merger; we do not have complete information about Helomics; the combined company will not be able to continue operating without additional financing; possible failure to realize anticipated benefits of the merger; costs associated with the merger may be higher than expected; the merger may result in disruption of the Company’s and Helomics’ existing businesses, distraction of management and diversion of resources; delay in completion of the merger may significantly reduce the expected benefits; and the market price of the Company’s common stock may decline as a result of the merger; (2) risks related to our partnerships with other companies, including the need to negotiate the definitive agreements; possible failure to realize anticipated benefits of these partnerships; and costs of providing funding to our partner companies, which may never be repaid or provide anticipated returns; and (3) other risks and uncertainties relating to the Company that include, among other things, current negative operating cash flows and a need for additional funding to finance our operating plan; the terms of any further financing, which may be highly dilutive and may include onerous terms; unexpected costs and operating deficits, and lower than expected sales and revenues; sales cycles that can be longer than expected, resulting in delays in projected sales or failure to make such sales; uncertain willingness and ability of customers to adopt new technologies and other factors that may affect further market acceptance, if our product is not accepted by our potential customers, it is unlikely that we will ever become profitable; adverse economic conditions; adverse results of any legal proceedings; the volatility of our operating results and financial condition; inability to attract or retain qualified senior management personnel, including sales and marketing personnel; our ability to establish and maintain the proprietary nature of our technology through the patent process, as well as our ability to possibly license from others patents and patent applications necessary to develop products; the Company's ability to implement its long range business plan for various applications of its technology; the Company's ability to enter into agreements with any necessary marketing and/or distribution partners and with any strategic or joint venture partners; the impact of competition, the obtaining and maintenance of any necessary regulatory clearances applicable to applications of the Company's technology; and management of growth and other risks and uncertainties that may be detailed from time to time in the Company's reports filed with the Securities and Exchange Commission, which are available for review at www.sec.gov. This is not a solicitation to buy or sell securities and does not purport to be an analysis of the Company's financial position. See the Company's most recent Annual Report on Form 10-K, and subsequent reports and other filings at www.sec.gov.
KCSA Strategic Communications
|PRECISION THERAPEUTICS INC.|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|June 30, 2018||December 31, 2017|
|Cash and Cash Equivalents||$||1,004,269||$||766,189|
|Certificates of Deposit||-||244,971|
|Prepaid Expense and other assets||275,476||289,966|
|Total Current Assets||2,007,244||2,371,182|
|Equity Method Investment (Note 2)||581,742||-|
|Fixed Assets, net||184,385||87,716|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Commitments and Contingencies||-||-|
|Series B Convertible Preferred Stock, $.01 par value, 20,000,000 authorized, 79,246 and 79,246 outstanding||792||792|
|Series C Convertible Preferred Stock, $.01 par value, 20,000,000 authorized, 0 and 647,819 outstanding||-||6,479|
|Common Stock, $.01 par value, 50,000,000 authorized, 12,089,446 and 6,943,283 outstanding||120,893||69,432|
|Additional paid-in capital||62,138,569||57,380,256|
|Total Stockholders' Equity||3,361,778||2,691,914|
|Total Liabilities and Stockholders' Equity||$||4,001,034||$||3,624,254|
|See Notes to Condensed Consolidated Financial Statements|
|PRECISION THERAPEUTICS INC.|
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE LOSS|
|Three Months Ended June 30,||Six Months Ended June 30,|
|Cost of goods sold||108,970||22,010||226,314||59,003|
|General and administrative expense||729,528||2,214,705||1,945,670||3,346,777|
|Sales and marketing expense||554,084||231,270||1,104,623||378,724|
|Loss on equity method investment||(960,508||)||-||(960,508||)||-|
|Net loss attributable to common shareholders||(1,412,902||)||(2,543,670||)||(3,172,924||)||(3,885,517||)|
|Loss per common share - basic and diluted||$||(0.20||)||$||(0.41||)||$||(0.36||)||$||(0.62||)|
|Weighted average shares used in computation - basic and diluted||11,878,490||6,167,689||11,632,221||6,308,554|