FOR: INNOVOTECH INC.
Innovotech Reports 2011 Year End Financial ResultsMAR 14, 2012 - 08:00 ET
EDMONTON, ALBERTA--(Marketwire - March 14, 2012) - Innovotech Inc. (TSX VENTURE:IOT), a pioneer in the field of biofilm product development, today announced its audited financial and operational results for the year ended December 31, 2011.
"2011 was a significant year for Innovotech as we achieved a number of key milestones related to product validation and market expansion, including receipt of regulatory approvals, designation as a standard, and the signing of a distribution agreement for the Company's veterinary tests which included preliminary sales," said Ken Boutilier, President and Chief Executive Officer of Innovotech. "While contract research revenue for the year decreased, we anticipate the trend for increased product sales, seen in 2011, to continue. Innovotech remains focused on the progression of products that are closer to generating revenue."
During the fourth quarter of 2011, Innovotech released results of a recent field trial demonstrating that its environmentally friendly crop protection product, Agress®, is an effective replacement for standard antibiotic treatments for the control of Fire Blight, a devastating bacterial disease of fruit trees.
Other 2011 Agress® field trials confirmed positive internal field and greenhouse trial results that had been seen in previous years for high-value added crops such as fruits, vegetables and pulses. During 2011, Innovotech also made significant progress in the area of Agress® chemistry, which will become an integral part of the Company's Environmental Protection Agency (EPA) submission.
Subsequent to the end of fiscal 2011, Innovotech announced that Syngenta decided not to pursue its Right of First Refusal for Innovotech's seed treatment product, Agress®.
|($)||Year ended December 31, 2011||Year ended December 31, 2010|
In the year ended December 31, 2011, total revenues were $1,087,905 (2010 - $1,595,052; 2009 - $1,453,924). This included contract research revenue of $935,990 (2010 - $1,431,975; 2009 - $1,360,979) and product sales of $151,915 (2010 - $103,077; 2009 - $92,945). Delays in regulatory approvals slowed the development programs of several clients resulting in the revenue decreases seen by Innovotech. Product sales, however, have increased by 48%, mainly as a result of sales of the Company's new product line for the veterinary market.
General and Administrative Expense
In the year ended December 31, 2011, general and administrative expense, including stock based compensation expense and allocated amortization expense, was $1,098,577 (2010 - $1,323,098). The decrease was mainly attributable to reduced expenses for legal and other professional services and improved management of foreign exchange transactions.
Research and Development
In the year ended December 31, 2011, research and development expense, including allocated amortization, was $1,100,567 (2010 - $947,393). The cost was partially offset by various grants of $499,060 (2010 - $236,892). The increase in research and development expense is directly related to increased development costs of a new family of products in human and veterinary susceptibility testing and extensive chemistry work on Agress®.
Liquidity and Capital Resources
At December 31, 2011, the Company had $495,275 in cash compared to $766,758 at December 31, 2010. Continued investment in development and marketing of two of the Company's lead products have contributed to a decrease in cash reserves since December 31, 2010. These expenditures were partially offset by the proceeds from the private placement initiated during the second quarter, as well as by cash inflows from product sales, contract research revenue and various grants.
The Company sees several opportunities for increased revenue from its expanded InnovoSCEPT product line, both in human health and the veterinary market. In human health, revenue channels include sales in the Israeli market and in the provision of a "biofilm diagnostic testing service" provided worldwide to doctors dealing with treatment failures in chronic infections that represent a $94 billion health care cost in the United States alone. The veterinary market provides additional revenue opportunities, where biofilm infections are as predominant as with humans, but where markets operate without regulatory approval and payment by pet owners is a standard practice. Any of these market opportunities could evolve very rapidly into sufficient revenue that could significantly change the Company's liquidity and capital resource position.
Innovotech's year end 2011 Financial Statements and Management's Discussion and Analysis will be filed on The System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.
Annual General Meeting
Innovotech's Annual General Meeting of Shareholders will be held on April 17, 2012 at 10:00am (Edmonton time) in the King Edward Room, 3rd Floor, Conference Centre, Manulife Place, 10180 - 101 Street, Edmonton, Alberta, T5J 3S4.
About Innovotech Inc.
Innovotech Inc. is a pioneer in the field of biofilm product development, focused on providing innovative and practical solutions to medical, agricultural and industrial problems caused by microbial biofilms. Biofilms are organized communities of microorganisms that exist in virtually every natural environment and are responsible for a host of diseases in human health, animal health and agriculture. There are few products or regulatory standards, aside from those of Innovotech, designed specifically for biofilm-forming organisms.
Innovotech has a broad range of products that address the issue of biofilms within a number of different industries, including commercially available products in three market segments; the MBEC Assay™, bioFILM PA™ and InnovoSCEPT veterinary kits. The MBEC Assay™ is a high throughput biofilm growth device that was recently approved as an ASTM International standard. bioFILM PA™ is the first diagnostic test to assist physicians in the selection of the most effective combination antibiotic treatment of patients with biofilm-based chronic lung infections, while the InnovoSCEPT veterinary tests are designed to determine the most effective antibiotic treatment for infections in both large and small animals.
Innovotech also has three products in advanced stages of development; InnovoSCEPT human tests have been designed specifically to address antibiotic treatment for human infections, Agress® is a unique, environmentally friendly seed treatment and plant spray designed to protect crops against both bacterial and fungal infections and Sani-Lux™ is a light-activated, natural hard surface sanitizer.
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This document may contain forward-looking statements that are predictive in nature and subject to risks and uncertainties that cannot be predicted or quantified; consequently, actual results may differ materially from past results and those expressed or implied by any forward-looking statements. Factors that could cause or contribute to such risks or uncertainties include, but are not limited to: the regulatory environment including the difficulty of predicting regulatory outcomes; changes in the value of the Canadian dollar; the Company's reliance on a small number of customers including government organizations; fluctuations in operating results; government policies or actions; progress and cost of clinical trials; reliance on key strategic relationships; uncertainty related to intellectual property protection and potential costs associated with its defense; the Company's exposure to lawsuits and other matters beyond the control of management. Should known or unknown risks or uncertainties materialize, or should management's assumptions prove inaccurate, actual results could vary materially from those anticipated. The Company undertakes no obligation to publicly make or update any forward-looking statements, except as required by applicable law.