GeneNews Announces Q4 2018 Results and Provides Progress Update

Company Builds Momentum with Launch of Patient Directed Cancer Testing; Gains Ground in Population Health Initiatives with Health Systems and Employers; and Plans are Underway for Validation of Next-Generation Cancer Panel – Aristotle®

TORONTO, ON / ACCESSWIRE / April 3, 2019 / GeneNews Limited (TSX: GEN) (”GeneNews” or the ”Company”) today announced operational and financial results for the three-month and twelve-month periods ended December 31, 2018 and provided a progress update on its business.

According to the Company’s CEO, James R Howard-Tripp, ”2018 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 ten cancers from a single sample of blood. This is a high impact market with sales potential estimates of $17 – $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 and, has now been used in over 100,000 patients in North America, to aid in the early detection of Colorectal Cancer (ColonSentry®).

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. GeneNew’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 proactive 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-pocket for these tests vs. go through their insurance. It is this type of educated healthcare 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% of the Company’s volume,” Says Howard-Tripp. ”We anticipate that telehealth/patient directed testing, screening of high-risk employees in self-funded employer health plans, and large healthcare system will each account for approximately 30% 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. The Company will therefore increase its efforts to reach large, self-funded employers, 75% of which cited high-cost claimants as one of the top drivers of rising health care. The number one catastrophic claim for employers in 2018 was Cancer, and the CDC predicts that by 2020 Cancer will be the leading cause of death in the United States.

”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,” said Howard-Tripp. ”We are excited about our future.”

Q4 2018 Financial Results

All amounts are expressed in U.S. dollars unless otherwise stated and results are reported in accordance with International Financial Reporting Standards.

For the three-month period ended December 31, 2018, we reported revenue of $0.07 million and a consolidated net loss of $0.7 million, or $0.03 loss per common share, as compared with revenue of $0.05 million and a consolidated net loss of $0.4 million, or $0.03 loss per common share, for the three-month period ended December 31, 2017. The $0.3 million increased loss results from the $1.4 million impact of the change in fair value of notes payable, $0.1 million change in fair value of conversion liability, the $0.1 million increase in finance costs offset by $0.2 million lower general and administrative expenses and $1.1 million revaluation of warrants.

During the fourth quarter of 2018, we received financing to support the roll-out into our Four Primary Growth Area initiatives including: small independent practices, high-risk populations/employers, telemedicine and large healthcare systems.

2018 Financial Results

All amounts are expressed in U.S. dollars unless otherwise stated and results are reported in accordance with International Financial Reporting Standards.

For the year ended December 31, 2018, we reported revenue of $0.2 million and a consolidated net loss of $3.9 million, or $0.03 loss per common share, as compared with revenue of $0.4 million and a consolidated net loss of $2.9 million, or $0.03 loss per common share, for the year ended December 31, 2017. The $1.0 million increased loss results from the $0.2 million lower revenues, $1.4 million impact of the change in fair value of notes payable, $0.1 million change in fair value of conversion liability, the $0.7 million increase in finance costs offset by $0.1 million lower cost of goods sold, $0.9 million lower general and administrative expenses and $0.4 million revaluation of warrants.

The Company’s financial statements and management’s discussion and analysis are available on www.sedar.com.

About GeneNews

GeneNews is dedicated to developing and commercializing innovative solutions for early cancer detection. Our mission is to provide advanced diagnostics that can help physicians identify cancer in their patients at the earliest possible stage (Stage-0) when it is the most curable. As early pioneers in the liquid biopsy space, GeneNews developed one of the first blood-based biomarker test for the early identification of Colorectal Cancer. ColonSentry® uses the company’s proprietary Sentinel Principle technology which is based on the scientific observation that circulating blood reflects, in a detectable way, what is occurring throughout the body. Today, more than 100,000 patients in the U.S. have benefited from the ColonSentry test. GeneNews’ next generation test, Aristotle®, will use this proven technology to test for ten cancers from a single blood sample. In addition to building a pipeline of products for early cancer detection, GeneNews operates a CAP and CLIA accredited, clinical reference lab based in Richmond, Virginia that offers the ColonSentry® test as well as licensed biomarker tests for lung, breast and prostate cancers. www.GeneNews.com

Forward-Looking Statements

This press release contains forward-looking statements identified by words such as ”expects”, ”will” and similar expressions, which reflect the Company’s current expectations regarding future events. The forward-looking statements involve risks and uncertainties that could cause the Company’s actual events to differ materially from those projected herein. Investors should consult the Company’s ongoing quarterly filings and annual reports for additional information on risks and uncertainties relating to these forward-looking statements. The reader is cautioned not to rely on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements, except as required by law.

Company Contact:

James R. Howard-Tripp
Chairman & CEO
[email protected]enews.com
Tel. (905) 209-2030

SOURCE: GeneNews Limited

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