Neoprobe Announces Third Quarter Results.
DUBLIN, Ohio -- Neoprobe Corporation (OTCBB:NEOP), a diversified developer of innovative oncology and cardiovascular surgical and diagnostic products, today announced financial results for the third quarter of 2006 and for the nine-month period ended September 30, 2006. For the third quarter of 2006, Neoprobe reported a net loss of $1.7 million or $0.03 per share compared to a net loss of $1.3 million or $0.02 per share for the third quarter in 2005. For the nine months ended September 30, 2006, Neoprobe reported a net loss of $3.4 million or $0.06 per share compared to a net loss of $3.6 million or $0.06 per share for the same period in 2005. The net loss for the third quarter of 2006 included $362,000 in non-cash charges compared to non-cash charges of $331,000 for the third quarter of 2005. The net loss for each of the nine-month periods ended September 30, 2006 and September 30, 2005 included $1.1 million in non-cash charges.
For the third quarter of 2006, Neoprobe reported total revenues of $1.0 million compared to $1.3 million for the third quarter in 2005. For the nine-month period ended September 30, 2006, Neoprobe reported total revenues of $4.2 million compared to total revenues of $4.5 million for the same period in 2005.
For the third quarter of 2006, Neoprobe reported total operating expenses of $1.9 million compared to $1.8 million for the third quarter of 2005. For the nine-month period ended September 30, 2006, Neoprobe reported total operating expenses of $5.0 million compared to $5.4 million for the same period in 2005.
Revenue from Neoprobe's gamma device business decreased compared to the prior year primarily due to an approximately 3% net price decline on approximately 10% lower sales volumes. Overall, the gamma device business through the third quarter of 2006 was in line with our expectations for the year. We expect volumes of our base neo2000 systems to be closer to historical levels during the fourth quarter of 2006. In addition, our primary marketing partner has committed to purchase minimum quantities of our new Bluetooth([R]) probes and we are in the process of completing manufacturing scale-up activities to meet their expected needs for the balance of 2006 and into 2007.
Our year-to-date sales of blood flow measurement equipment for 2006 are 80% greater than the comparable period from last year. Although this increase is significant, sales of our blood flow measurement equipment thus far have still not met our expectations. We are, however, encouraged by activities related to our distribution relationship with ESTECH, Inc. which was expanded during the third quarter to cover the European Union. We are experiencing significantly more competitive product evaluations in recent months following the completion of training of the ESTECH sales force in the U.S. Further, we see the marketplace continuing to transition to a "per use" pricing methodology which, although it does not result in recognizable revenue as rapidly as a capital purchase, should result in longer term economic benefit to Neoprobe. Finally, our Asian marketing partner has received clearance to market the Quantix/OR[TM] product in certain Asian markets and we expect to receive additional customer orders related to those markets during 2007. Overall, we remain cautiously optimistic about our blood flow measurement device business as we look toward the remainder of 2006 and into early 2007.
We had originally hoped to provide top-line results for the first 40 patients in our Phase 2 trial of Lymphoseek([R]) during early October. Unfortunately, the time required to obtain the necessary approvals from the Institutional Review Boards (IRBs) and to then execute the research contracts at some of the participating clinical institutions has taken longer than expected. We now have IRB approval at four of the five participating institutions and are actively enrolling patients at three of these sites. We are awaiting the execution of the research contract at the fourth site in order to commence enrollment in November. We expect to have IRB approval at the fifth and final site in November so that patient enrollment can commence there as well. While it is possible for us to complete the Phase 2 trial with patients recruited from institutions that already are enrolling patients in the Phase 2 study, we would like participation in the study to be as broad as possible. Therefore, we do not expect to announce the results from the first 40 patients prior to the end of the year. We do not currently expect enrollment in the Phase 2 trial to be complete until the first quarter of 2007. This will also mean that the commencement of the Phase 3 trial will likely now begin sometime during the latter part of the second quarter of 2007; however, we currently plan to increase the number of participating institutions in the Phase 3 trial beyond our original target of 10 to 12 institutions in order to enable us to accrue patients at a more rapid rate. Our goal is to file the NDA for Lymphoseek by the end of 2007.
David Bupp, Neoprobe's President and CEO, said, "The administrative process of getting the institutional consents to commence patient enrollment in the Phase 2 study has been more time consuming than expected and has been frustrating to management and I'm sure to our investors. We are encouraged that the results of the Phase 2 study to date have been consistent with the earlier Phase 1 evaluations of Lymphoseek. It remains our intention to provide more detailed information to the investment community as soon as possible, but our first commitment is to meet our regulatory obligation regarding the reporting of results and to make sure that the studies are conducted using the most appropriate and best clinical practices." The clinical sites involved in the Phase 2 study include University of California, San Francisco, The John Wayne Cancer Center, the University of Louisville, M. D. Anderson and University Hospitals - Case Western Reserve.
Year-to-date corporate development milestones achieved are:
* Received renewal of gamma device distribution agreement with Ethicon Endo-Surgery through December 2008
* Completed Lymphoseek regulatory submission of CMC response
* Received FDA clearance to commence patient enrollment in Phase 2 clinical study
* Received first commercial production of Quantix devices from U.S. based contract manufacturer
* Completed Investigational New Drug amendment submission for RIGScan([R]) CR
* Reviewed Phase 2 Lymphoseek protocol and clinical program with clinical investigators at Society of Surgical Oncology meeting
* Completed agreement with ESTECH, Inc. for distribution of the Quantix/OR in the U.S. and Europe
* Commenced Phase 2 Lymphoseek clinical study with cGMP produced drug
* Introduced Bluetooth wireless gamma detection probe at the recent American College of Surgeons meeting and received purchase commitment from primary marketing partner
Neoprobe's President and CEO, David Bupp, and Vice President and CFO, Brent Larson, will provide a business update and discuss the company's third quarter 2006 results via a conference call scheduled for 10:00 AM EST, Friday, November 3, 2006. The conference call can be accessed as follows:
Neoprobe is a biomedical company focused on enhancing patient care and improving patient outcome by meeting the critical intraoperative diagnostic information needs of physicians and therapeutic treatment needs of patients. Neoprobe currently markets the neo2000[R] line of gamma detection systems that are widely used by cancer surgeons and is commercializing the Quantix([R]) line of blood flow measurement products developed by its subsidiary, Cardiosonix Ltd. In addition, Neoprobe holds significant interests in the development of related biomedical systems and radiopharmaceutical agents including Lymphoseek([R]) and RIGScan([R]) CR. Neoprobe's subsidiary, Cira Biosciences, Inc., is also advancing a patient-specific cellular therapy technology platform called ACT. Neoprobe's strategy is to deliver superior growth and shareholder return by maximizing its strong position in gamma detection technologies and diversifying into new, synergistic biomedical markets through continued investment and selective acquisitions. www.neoprobe.com
Statements in this news release, which relate to other than strictly historical facts, such as statements about the Company's plans and strategies, expectations for future financial performance, new and existing products and technologies, anticipated clinical and regulatory pathways, and markets for the Company's products are forward-looking statements The words "believe," "expect," "anticipate," "estimate," "project," and similar expressions identify forward-looking statements that speak only as of the date hereof. Investors are cautioned that such statements involve risks and uncertainties that could cause actual results to differ materially from historical or anticipated results due to many factors including, but not limited to, the Company's continuing operating losses, uncertainty of market acceptance of its products, reliance on third party manufacturers, accumulated deficit, future capital needs, uncertainty of capital funding, dependence on limited product line and distribution channels, competition, limited marketing and manufacturing experience, risks of development of new products, regulatory risks and other risks detailed in the Company's most recent Annual Report on Form 10-KSB and other Securities and Exchange Commission filings. The Company undertakes no obligation to publicly update or revise any forward-looking statements.
The Bluetooth[R] word mark and logos are owned by the Bluetooth SIG, Inc. and any use of such marks by Neoprobe Corporation is under license. Other trademarks and trade names are those of their respective owners.
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