EXHIBIT 99.1
[SPECTRX LETTERHEAD]
SPECTRX, INC. (770) 242-8723 FRB|WEBER SHANDWICK (212) 445-8300
Bill Wells - Media Alison Ziegler Julie Tu Judith Sylk-Siegel
Thomas H. Muller, Jr. - Financial General Contact Analyst Information Media Contact
SPECTRX, INC. REPORTS SECOND QUARTER 2002 RESULTS
BiliChek(R) Sell Through in U.S. Increasing;
FDA reviewing Non-invasive Cervical Cancer Detection Device Study Protocol;
Positive Study Results for Glucose Monitoring Device
NORCROSS, GA, JULY 30, 2002 -- SPECTRX, INC. (NASDAQ: SPRX) today
announced that revenue for the quarter ended June 30, 2002 increased 22% to
$774,000 from $635,000 in the second quarter of 2001. Revenue from sales of
BiliChek(R) disposables was up 34% over the same quarter of last year,
reflecting a 181% increase in U.S. revenue.
Revenue for the entire BiliChek(R) product line was $612,000 for the
second quarter of 2002, up 6% compared to the second quarter of 2001. Sales for
the quarter were 211 BiliChek(R) devices and approximately 108,000 disposables.
For the six months ended June 30, 2002, total revenue was $1.4 million
versus $1.3 million for the same period last year, up 14%. BiliChek(R) product
line revenues were $1.1 million, up 6% over the same period of 2001. Gross
margin for the BiliChek(R) product line continued to improve and was 57% for the
quarter and 42% for the six months due to increased manufacturing efficiencies
and reduction in overhead.
The net loss available to common stockholders for the second quarter of
2002 was $3.3 million, or $0.29 per share, compared with a net loss available to
common stockholders of $1.4 million, or $0.16 per share, in the comparable
quarter of 2001. For the first six months of this year, the net loss available
to common stockholders was $5.7 million, or $0.51 per share, compared with a net
loss available to common stockholders of $3.8 million, or $0.44 per share, in
the first half of 2001, primarily as a result of increased expenses related to
the SimpleChoice(TM) product line.
DIABETES BUSINESS UPDATE --
"We received eight FDA clearances in the second quarter for three
SimpleChoice insulin delivery products which we plan to roll out in the next 12
to 18 months, the first being the SimpleChoice easy," said Mark A. Samuels,
SpectRx's Chairman and CEO. "While we are very pleased with the market reaction
to our proposed product line, we recently have had to resolve a variety of
unexpected issues relating to the production start up. We and our suppliers have
had some coordination issues, and testing of the first few thousand infusion
sets revealed changes that were needed before product launch. As a result, we
will not be in a position to launch in the third quarter. However, these issues
appear to have been resolved, and assuming the next phase of testing goes well,
we hope to launch the product by the end of 2002 or early 2003."
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"At the American Diabetes Association meeting in June we presented new
results from clinical studies of our interstitial fluid glucose monitoring
technology. In a two-day interval study involving 252
SPECTRX - 2Q2002, JULY 30, 2002
PAGE 2
patients, the correlation to blood glucose levels was 95% for day one and 90%
for day two. These results are very encouraging and based on this performance,
would indicate that our technology is potentially superior to any of today's
continuous glucose monitoring alternatives. Meanwhile, our collaborative
partner, Abbott Laboratories, continues to be responsible for the
commercialization work to bring the continuous glucose monitoring product to
market," Mr. Samuels said.
NON-INVASIVE BUSINESS UPDATE-
"We continue to be very pleased with the progress being made in the
development of our non-invasive cervical cancer detection device. Results from
our current clinical study indicate that the device outperforms both the Pap and
HPV tests in detecting disease. The U.S. Food and Drug Administration is
currently reviewing our protocol for pivotal clinical trials of the device,
which we would expect to begin in late 2002 or early 2003 if we receive timely
FDA approval to proceed," Mr. Samuels said. "As we have previously indicated, we
and development partner Welch Allyn, have been reviewing the product
positioning, methods of funding and our relationship in light of the changing
marketplace. We now expect to enter into a cross licensing agreement that should
allow SpectRx to independently commercialize the product."
"Sales of BiliChek disposables continue to grow, with shipments to
U.S. marketing partner Respironics up substantially for the quarter due to
increased sell through of BiliChek devices to end users. As expected, device
sales remained basically flat compared to the same quarter last year, although
they increased 65% from the first quarter of this year. Year to date disposable
revenue is up 54%," Mr. Samuels said.
"We are pleased with the positive trend in gross margin for the
BiliChek as a result of manufacturing efficiencies and a reduction in overhead,"
said Thomas H. Muller, Jr., SpectRx CFO. "We expect the BiliChek business to
continue the trend begun in the first half of the year, with flat to modest
growth for device sales and much stronger growth in the sales of disposables.
"We expect the market launch of our SimpleChoice product line to build
increasing revenue through the fourth quarter of next year, when higher volume
production is expected to come on line. We also expect to receive a milestone
payment from Abbott of $1 million, but there is a dispute as to whether we have
met the criteria to receive the payment. We expect the issue to be resolved in
October," Mr. Muller said.
SpectRx management will hold a conference call to discuss second
quarter 2002 results on Wednesday, July 31 at 10 a.m. EDT. To access the call
via telephone, call 800-482-2225 or visit www.ccbn.com for access via the
Internet.
SpectRx, Inc. is a medical technology company providing innovative
detection, monitoring and treatment solutions for the diabetes and non-invasive
diagnostics healthcare markets. SpectRx is developing and will market the
SimpleChoice(TM) line of innovative insulin delivery products for people with
diabetes. These FDA-cleared products complement SpectRx's consumer device for
continuous glucose monitoring under development with Abbott Laboratories.
SpectRx is also creating opportunities for its leading-edge biophotonic
detection and monitoring technology, which uses light and spectral energies to
create painless alternatives to blood-based and tissue-based procedures.
Non-invasive products include a developmental non-invasive cervical cancer
detection device. SpectRx also markets the BiliChek(R) Non-invasive Bilirubin
Analyzer, a biophotonic, non-invasive, painless monitor for infant jaundice. For
more information, visit SpectRx's web site at www.spectrx.com.
SpectRx and BiliChek are trademarks owned by SpectRx, Inc. SimpleChoice
and SimpleChoice easy are trademarks owned by SimpleChoice, a SpectRx Company.
"Safe Harbor" Statement under the Private Securities Litigation Reform
Act of 1995: A number of the matters and subject areas discussed in this press
release that are not historical or current facts deal with potential future
circumstances and developments. The discussion of such matters and subject areas
is qualified by the inherent risks and uncertainties surrounding future
expectations generally and also may materially differ from SpectRx's actual
future experience involving any of or more of such matters and subject areas.
SpectRx has attempted to identify, in context, certain of the factors that it
currently believes may cause actual future experience
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SPECTRX - 2Q2002, JULY 30, 2002
PAGE 3
and results to differ from SpectRx's current expectations regarding the relevant
matter or subject area. Such risks and uncertainties include: the early stage of
products in development, its dependence on collaborative arrangements, the
uncertainty of market acceptance of its products, the uncertainty of development
or effectiveness of distribution channels, the intense competition in the
medical device industry, the uncertainty of capital to develop products, the
uncertainty of regulatory approval of its products, its dependence on licensed
intellectual property, as well as those that are more fully described from time
to time in SpectRx's reports under the heading "Risk Factors" filed with the
SEC, including SpectRx's Annual Report on Form 10-K for the fiscal year ended
December 31, 2001 and subsequent quarterly reports.
Financial Tables
Dollars in Thousands except per share data
SPECTRX, INC.
CONDENSED STATEMENT OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
------- -------
2002 2001 2002 2001
-------- ------- -------- -------
REVENUE $ 774 $ 635 $ 1,426 $ 1,256
-------- ------- -------- -------
EXPENSES
Cost of Sales 393 506 817 1,007
Research & Development 1,873 636 3,326 2,208
Selling, General & Administrative 1,704 895 2,885 1,789
-------- ------- -------- -------
Total Operating Expenses 3,970 2,037 7,028 5,004
-------- ------- -------- -------
OPERATING LOSS (3,196) (1,402) (5,602) (3,748)
INTEREST & OTHER INCOME 21 42 57 78
-------- ------- -------- -------
NET LOSS (3,175) (1,360) (5,545) (3,670)
PREFERRED STOCK DIVIDENDS (79) (79) (158) (158)
-------- ------- -------- -------
NET LOSS AVAILABLE
TO COMMON STOCKHOLDERS $ (3,254) $(1,439) $ (5,703) $(3,828)
======== ======= ======== =======
BASIC & DILUTED NET LOSS PER SHARE $ (0.29) $ (0.16) $ (0.51) $ (0.44)
======== ======= ======== =======
BASIC & DILUTED 11,197 9,048 11,195 8,781
======== ======= ======== =======
WEIGHTED AVERAGE SHARES OUTSTANDING
SELECTED BALANCE SHEET DATA (UNAUDITED)
June 30, 2002 December 31, 2001
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CASH & CASH EQUIVALENTS $ 3,269 $ 9,458
WORKING CAPITAL 4,091 9,320
TOTAL ASSETS 12,356 18,325
ACCUMULATED DEFICIT (44,983) (39,280)
STOCKHOLDERS' EQUITY (DEFICIT) 3,802 9,372
CONVERTIBLE
REDEEMABLE PREFERRED STOCK $ 4,897 $ 4,769
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