EXHIBIT 99.1
Sontra Medical Reports Fourth Quarter and Fiscal Year 2004 Results and Business Update
FRANKLIN, Mass., February 16, 2005 — Sontra Medical Corporation (Nasdaq: SONT) announced today financial results for the fourth quarter and fiscal year ended December 31, 2004. For the three months ended December 31, 2004, the net loss applicable to common stockholders was $1,663,000, or $.08 per share, as compared to $2,794,000, or $.29 per share, for the same period in 2003. For the year ended December 31, 2004, the net loss applicable to common stockholders was $5,774,000, or $.34 per share, as compared to $6,156,000, or $.65 per share, in 2003. The Company completed a $4 million equity financing in December and ended the year with $9,515,000 in cash with no debt. The Company expects that its cash on hand will be sufficient to fund operations through at least June 2006.
Product Highlights:
SonoPrep(R) and Procedure Tray for Topical Lidocaine:
• | Seven regional distributors with sales representatives covering approximately 70% of hospital market are now selling SonoPrep. |
• | Signed U.S. distribution agreement with VNUS Medical Technologies for the varicose vein market. |
• | A combined sales force of 100 representatives now promotes SonoPrep. |
• | SonoPrep featured in Time Magazine, Reader’s Digest, Popular Science, Health Magazine and Contemporary Pediatrics. |
• | Completed two successful clinical trials in pediatric patients, the largest immediate target market for SonoPrep. |
Continuous Non-Invasive Glucose Monitoring System
• | Completed successful human clinical trial and system reliably detected real time changes in glucose (correlation of 90%). |
Transdermal Vaccination:
• | Completed successful human trial at UMASS Medical Center demonstrating that SonoPrep facilitated the transdermal delivery of large antigenic proteins to induce an immune response. |
“We have made significant progress rolling out the SonoPrep product for the $100 million topical lidocaine market and in the development of other transdermal products,” stated Thomas W. Davison, PhD, Sontra’s President and Chief Executive Officer. “We are working closely with our new SonoPrep distributors and expect to have full U.S. distribution in place as planned by June 2005. We have improved the accuracy and reliability of our continuous non-invasive glucose monitoring system and the results of our October 2004 human clinical study conducted at Vanderbilt University clearly demonstrated the potential of our enabling technology. In that study, our system was more accurate than the MiniMed implantable sensor and the Cygnus GlucoWatch, especially in the detection of hypoglycemia. We have refined our product strategy and are now developing a continuous glucose monitor for post-surgical intensive care. The hospital product is being developed in parallel with the home testing and physician diabetes management products. During 2005, we expect to complete product definition and begin product development so that we can commence pivotal FDA clinical studies and potentially launch the hospital product by the end of 2006.”
Dr. Davison added, “For transdermal vaccination, we expect to commence two additional human clinical studies during the first half of 2005, a hepatitis A vaccine study at UMASS Medical Center and a flu vaccine study at St. Louis University. Based on our initial clinical results, we are confident that the SonoPrep technology can address major health challenges of the $5 billion glucose testing market and the $3 billion vaccine market. We also believe we have the potential to change the existing transdermal drug delivery model and be the first company to deliver large molecular weight drugs through the skin.”
Conference Call Information
Sontra will host a live conference call and listen-only Webcast on Thursday, February 17, 2005 at 11 a.m. ET to provide a business update and discuss its fourth quarter and fiscal year 2004 financial results.
To participate in the conference call, please dial: 1-973-409-9259.
A listen-only Webcast and replay of the conference call are available athttp://www.sontra.com.
About Sontra Medical Corporation (http://www.sontra.com)
Sontra Medical Corporation is a technology leader in transdermal science. Sontra’s SonoPrep ultrasound-mediated skin permeation technology combined with technical competencies in transdermal drug formulation, delivery systems and biosensors is creating a new paradigm in transdermal drug delivery and diagnosis. The SonoPrep technology has demonstrated strong results from its initial human clinical trials at leading universities and medical centers for several billion dollar market opportunities including the transdermal delivery of vaccines and large molecule drugs and continuous non-invasive glucose monitoring. Sontra is currently marketing the SonoPrep device and procedure tray for use with topical lidocaine to achieve rapid (within five minutes) skin anesthesia.
SonoPrep is a registered trademark of Sontra Medical Corporation. All other company, product or service names mentioned herein are the trademarks or registered trademarks of their respective owners.
This press release contains forward-looking statements, which address a variety of subjects including, for example, the expected efficacy of the SonoPrep device in connection with diagnostics, vaccine delivery, glucose monitoring and transdermal drug delivery, the expected benefits, market opportunities, distribution and market acceptance of the SonoPrep device and technology, the expected size of the markets for the SonoPrep device and technology, Sontra’s expected ability to commercialize additional products, and Sontra’s business, research, marketing and distribution strategies and product development plans. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Such statements are based on our current expectations and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. The following important factors and uncertainties, among others, could cause actual results to differ materially from those described in these forward- looking statements: adverse results in product development, clinical trials, commercialization efforts, product distribution and market acceptance; difficulties or delays in obtaining regulatory approvals to market products resulting from development efforts; difficulties or delays associated with sources of regulatory-approved transdermal drugs and vaccines; failure to obtain and maintain patent protection for discoveries; commercial limitations imposed by patents owned or
controlled by third parties; dependence upon strategic partners and third-party distributors to develop, commercialize, market and sell products based on our work; the commercial success of products; and the requirement for substantial funding to conduct research and development and to expand commercialization, distribution and marketing activities. For detailed information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to Sontra’s filings with the Securities and Exchange Commission, including Sontra’s most recent Annual Report on Form 10-KSB. Forward-looking statements represent management’s current expectations and are inherently uncertain. We do not undertake any obligation to update forward- looking statements made by us.
Contacts:
Sean Moran, Sontra Medical CFO
508-553-8850 ext 234
or
Evan Smith, CFA / Erica Pettit, Financial Dynamics
212-850-5606 / 212-850-5614
SONTRA MEDICAL CORPORATION
Consolidated Statements of Loss
For the Years Ended December 31, | For the Three Months Ended December 31, | |||||||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||||||
Product revenues | $ | 33,565 | $ | — | $ | 18,811 | $ | — | ||||||||
Licensing revenue | — | 1,500,000 | — | — | ||||||||||||
Total revenue | 33,565 | 1,500,000 | 18,811 | — | ||||||||||||
Cost of product revenue | 16,680 | — | 10,356 | — | ||||||||||||
Gross margin | 16,885 | 1,500,000 | 8,455 | — | ||||||||||||
Operating Expenses: | ||||||||||||||||
Research and development | 3,039,450 | 2,265,519 | 974,665 | 782,528 | ||||||||||||
Selling, general and administrative | 2,423,806 | 1,740,555 | 731,845 | 552,625 | ||||||||||||
Total operating expenses | 5,463,256 | 4,006,074 | 1,706,510 | 1,335,153 | ||||||||||||
Loss from operations | (5,446,371 | ) | (2,506,074 | ) | (1,698,055 | ) | (1,335,153 | ) | ||||||||
Interest income | 86,189 | 26,620 | 36,929 | 12,126 | ||||||||||||
Net loss | (5,360,182 | ) | (2,479,454 | ) | (1,661,126 | ) | (1,323,027 | ) | ||||||||
Accretion of dividend and beneficial conversion feature on Series A Convertible Preferred Stock | (413,901 | ) | (3,676,590 | ) | (1,449 | ) | (1,470,579 | ) | ||||||||
Net loss applicable to common shareholders | $ | (5,774,083 | ) | $ | (6,156,044 | ) | $ | (1,662,575 | ) | $ | (2,793,606 | ) | ||||
Net loss per common share, basic and diluted | $ | (0.34 | ) | $ | (0.65 | ) | $ | (0.08 | ) | $ | (0.29 | ) | ||||
Basic and diluted weighted average common shares outstanding | 16,763,798 | 9,467,912 | 19,840,477 | 9,719,192 |
SONTRA MEDICAL CORPORATION
Consolidated Balance Sheets
As of December 31, | ||||||||
2004 | 2003 | |||||||
Assets: | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 9,515,244 | $ | 4,868,933 | ||||
Accounts receivable | 16,821 | 1,500,000 | ||||||
Legal settlement receivable | 250,000 | — | ||||||
Inventory, net | 152,642 | — | ||||||
Prepaid expenses and other current assets | 69,492 | 66,075 | ||||||
Total current assets | 10,004,199 | 6,435,008 | ||||||
Property and Equipment, at cost: | ||||||||
Computer equipment | 206,970 | 171,272 | ||||||
Office and laboratory equipment | 492,377 | 405,285 | ||||||
Furniture and fixtures | 14,288 | 14,288 | ||||||
Manufacturing equipment | 182,210 | 144,695 | ||||||
Leasehold improvements | 174,698 | 166,289 | ||||||
1,070,543 | 901,829 | |||||||
Less-accumulated depreciation and amortization | (655,242 | ) | (498,341 | ) | ||||
Net property and equipment | 415,301 | 403,488 | ||||||
Other Assets: | ||||||||
Restricted cash | 38,997 | 48,746 | ||||||
Other assets | 2,000 | 2,000 | ||||||
Total assets | $ | 10,460,497 | $ | 6,889,242 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 358,530 | $ | 136,810 | ||||
Accrued expenses | 759,051 | 465,092 | ||||||
Total current liabilities | 1,117,581 | 601,902 | ||||||
Commitments | ||||||||
Stockholders’ Equity | ||||||||
Series A Convertible Preferred Stock, $0.01 par value, authorized 7,000,000 shares, issued and outstanding 73,334 shares at December 31, 2004 (preference in liquidation of $76,291) and 6,495,000 shares at December 31, 2003 | 76,291 | 6,628,842 | ||||||
Common stock, $0.01 par value, authorized 40,000,000 shares, issued and outstanding 21,935,732 shares at December 31, 2004 and 10,102,992 shares at December 31, 2003 | 219,358 | 101,030 | ||||||
Additional paid-in capital | 32,674,740 | 17,952,721 | ||||||
Deferred stock-based compensation | (244,912 | ) | (372,874 | ) | ||||
Accumulated deficit | (23,382,561 | ) | (18,022,379 | ) | ||||
Total stockholders’ equity | 9,342,916 | 6,287,340 | ||||||
Total liabilities and stockholders’ equity | $ | 10,460,497 | $ | 6,889,242 |