RICHLAND, Wash., Sept. 28, 2017 /PRNewswire/ -- IsoRay, Inc.
(NYSE MKT: ISR), a medical technology company and innovator in seed
brachytherapy and medical radioisotope applications for the
treatment of prostate, brain, lung, head and neck and gynecological
cancers, today announced its final financial results for the
fourth quarter and fiscal year ended June 30, 2017.
Revenue for the fourth quarter of fiscal 2017 was $1.37
million, a 22% increase compared to $1.12 million revenue
for the fourth quarter of fiscal 2016 and a 7% increase compared to
revenue of $1.28 million in the third
quarter of fiscal 2017. The increase in revenue is primarily due to
a growing customer count from new and returning
practitioners. Prostate brachytherapy represented 88%
and 85% of total revenue for the fourth quarter of fiscal 2017 and
2016, respectively and 89% of total revenue for the third quarter
of fiscal 2017. Gross profit for the three months ended
June 30, 2017 was $0.50 million compared to a loss of $0.05 million in the prior year period and
$0.29 million in the third quarter of
fiscal 2017. The increase is primarily due to expense reductions
and process and manufacturing improvements put in place over the
past year. Gross profit margin was 36% in the current period
compared to a negative gross margin in the fourth quarter of fiscal
2016 and 23% in the third quarter of fiscal 2017.
Operating expenses were $2.36 million compared
to $1.21 million in the fourth quarter of the last fiscal
year. The increase is primarily due to continued investment in
research and development and implementation of the company's new
sales and marketing initiatives. In addition to these investments,
during the fourth quarter the Company completed the settlement of a
class action lawsuit for $0.195
million and had expenses related to a special shareholders'
meeting. These one-time expenses were recorded in the fourth
quarter. In 2016, fourth quarter expenses were reduced by an asset
retirement obligation adjustment of $0.456
million primarily related to an extension of the lease term
for the manufacturing facility. Operating loss was $1.86
million compared to a $1.25 million loss in the
fourth quarter of fiscal 2016. The net loss was $1.86 million, or ($0.03) per basic and diluted share, for the
fourth quarter of fiscal 2017 compared to a net loss of
$1.19 million, or ($0.02) per basic and diluted share, for the
fourth quarter of fiscal 2016. Basic and diluted per share results
are based on weighted average shares outstanding of approximately
55.0 million for both periods. IsoRay had cash and cash equivalents
and certificates of deposit of $9.0 million as
of June 30, 2017, and no debt.
For the fiscal year ended June 30,
2017, revenue was $4.76
million, consistent with revenue of $4.77 million for the fiscal year ended
June 30, 2016. Prostate brachytherapy
represented 88% and 86% of total revenue for fiscal 2017 and 2016,
respectively. Operating expenses were $7.15
million for fiscal 2017 compared to $5.21 million for the year ended June 30, 2016. Gross profit was
$0.84 million compared to
$0.13 million for the prior
year. Increased investments in research and development and
sales and marketing accounted for the majority of the increase.
Operating loss was $6.31 million for
fiscal 2017, compared to a $5.08
million operating loss for fiscal 2016. The net loss was
$6.16 million, or ($0.11) per basic and diluted share, for fiscal
2017 compared to a net loss of $4.71
million, or ($0.09) per basic
and diluted share, for fiscal 2016. Basic and diluted per share
results are based on weighted average shares outstanding of
approximately 55.0 million for both periods.
"Our fourth quarter results reflect the momentum that has begun
to build for IsoRay," said Thomas
LaVoy, Chairman and Chief Executive Officer of IsoRay, Inc.
"Sales increased 22% year-over-year in the fourth quarter after
increasing 7% year-over-year in the third quarter of this year.
These increases come after the transition in our sales and
marketing team during the second half of fiscal 2016 which
continued into early fiscal 2017, as well as the revamping of our
entire sales and marketing strategy with a renewed focus on
marketing that we rolled out last fall. We believe that IsoRay's
growing customer count from both new and returning practitioners
validates the strategic changes that we've made. For the full
fiscal year, revenue was flat year-over-year, with the stronger
second half offsetting the approximate 14% revenue decline of the
first half of the fiscal year when the new sales team and
strategies were being implemented. Process and manufacturing
improvements, as well as expense reductions, contributed to the
sustainable expansion of the gross margin to 36% in the fourth
quarter."
"Increasing evidence of Cesium-131's efficacy and lower side
effect profile as reported in a growing list of studies is
supportive of our two-pronged growth strategy focused on prostate
brachytherapy and brachytherapy for other parts of the body
including brain and gynecological cancers. In prostate
brachytherapy, emerging clinical data demonstrates sustained
clinical outcomes with rapid patient return to baseline recently
published in a study by the University of
Pittsburgh Medical Center. Another recent study reported
durable positive outcomes for Cesium-131 in prostate cancer
patients followed over nine years, the longest data ever
available."
Mr. LaVoy continued, "In other cancers, a growing number of
leading institutions are performing brain brachytherapy with
Cesium-131. There are multiple publications from Weill Cornell
Medical College that demonstrate high rates of brain cancer control
when Cesium-131 brachytherapy is combined with surgery. And
IsoRay's collaboration with GammaTile LLC to develop and
commercialize a custom delivery system is in development with a
filing for FDA clearance and reimbursement code assignment in
process. In gynecological cancers, a new study was recently
accepted for publication in the highly respected International
Journal of Radiation Oncology, Biology, Physics (the "Red Journal")
on Cesium-131's use in recurrent pelvic malignancies. The study
found that the use of Cesium-131 has the ability to control local
disease, avoid radical surgery, and provide an improved quality of
life for these patients."
"IsoRay is in a unique position as the only manufacturer in the
world of Cesium-131, which we believe is the 'next' generation
brachytherapy isotope that delivers a faster, more consistent
treatment. The combination of improvement in IsoRay's strategic
focus and execution, as seen in our fourth quarter results,
supported by the growing evidence of Cesium-131's efficacy in
treating multiple types of cancers, gives us confidence in our
outlook for growth in fiscal 2018 and beyond," concluded Mr.
LaVoy.
About IsoRay, Inc.
IsoRay, Inc., through its subsidiary, IsoRay Medical, Inc. is
the sole producer of Cesium-131 brachytherapy seeds, which are
expanding brachytherapy options throughout the body. Learn more
about this innovative Richland, Washington company and
explore the many benefits and uses of Cesium-131 by
visiting www.isoray.com. Join us on Facebook/IsoRay. Follow us
on Twitter @IsoRay.
Safe Harbor Statement
Statements in this news release about IsoRay's future
expectations, including: the advantages of our products and their
delivery systems, whether interest in and use of our products will
increase or continue, whether the new marketing strategy will
increase sales, whether the changes to the sales staff will result
in increased sales, whether the additional resources being added to
IsoRay's online presence will increase patient or clinician
engagement and interest, whether use of Cesium-131 in non-prostate
applications will increase revenue, whether we obtain and the
timing of obtaining our FDA application for 510(k) clearance and
favorable reimbursement codes, our ongoing relationship with
GammaTile LLC, whether further automation of production processes
will be completed or will result in lower costs, whether revenue
will increase and costs decrease in the upcoming quarters, the
positive industry data fueling renewed interest in brachytherapy,
strong patient results, the perception by patients of quality of
life outcomes, and all other statements in this release, other than
historical facts, are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995
("PSLRA"). This statement is included for the express purpose of
availing IsoRay, Inc. of the protections of the safe harbor
provisions of the PSLRA. It is important to note that actual
results and ultimate corporate actions could differ materially from
those in such forward-looking statements based on such factors as
physician acceptance, training and use of our products, our ability
to successfully manufacture, market and sell our products, our
ability to manufacture our products in sufficient quantities to
meet demand within required delivery time periods while meeting our
quality control standards, our ability to enforce our intellectual
property rights, whether additional studies are released and
support the conclusions of past studies, whether ongoing patient
results with our products are favorable and in line with the
conclusions of clinical studies and initial patient results,
patient results achieved when our products are used for the
treatment of cancers and malignant diseases, successful completion
of future research and development activities, whether we, our
distributors and our customers will successfully obtain and
maintain all required regulatory approvals and licenses to market,
sell and use our products in its various forms, continued
compliance with ISO standards, the success of our sales and
marketing efforts, changes in reimbursement rates, the procedures
and regulatory requirements mandated by the FDA for 510(k) approval
and reimbursement codes, agreements we ultimately negotiate with
third parties related to distribution of GammaTile products,
changes in laws and regulations applicable to our products, the
scheduling of physicians who either delay or do not schedule
patients in periods anticipated, the use of competitors'
products in lieu of our products, less favorable reimbursement
rates than anticipated for each of our products, and other risks
detailed from time to time in IsoRay's reports filed with the SEC.
Unless required to do so by law, we undertake no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
IsoRay, Inc.
and Subsidiaries
|
|
|
|
Consolidated
Balance Sheets
|
|
|
|
(In
thousands, except shares)
|
|
|
|
|
June
30,
|
|
June
30,
|
|
2017
|
|
2016
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
5,932
|
|
$
10,139
|
Certificates of
deposit (Note 3)
|
3,039
|
|
2,247
|
Accounts
receivable, net of allowance for doubtful accounts of $26 and $30,
respectively
|
726
|
|
605
|
Inventory
|
323
|
|
334
|
Prepaid expenses
and other current assets
|
271
|
|
304
|
|
|
|
|
Total current
assets
|
10,291
|
|
13,629
|
|
|
|
|
Property and
equipment, net
|
1,054
|
|
577
|
Certificates of
deposit, non-current (Note 3)
|
-
|
|
2,973
|
Restricted
cash
|
181
|
|
181
|
Inventory,
non-current
|
513
|
|
591
|
Other assets,
net of accumulated amortization
|
230
|
|
151
|
|
|
|
|
Total
assets
|
$
12,269
|
|
$
18,102
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable
and accrued expenses
|
$
630
|
|
$
612
|
Accrued protocol
expense
|
75
|
|
122
|
Accrued
radioactive waste disposal
|
125
|
|
177
|
Accrued payroll
and related taxes
|
138
|
|
72
|
Accrued
vacation
|
138
|
|
111
|
|
|
|
|
Total current
liabilities
|
1,106
|
|
1,094
|
Long-term
liabilities:
|
|
|
|
Warrant
derivative liability
|
-
|
|
27
|
Asset retirement
obligation
|
561
|
|
580
|
|
|
|
|
Total
liabilities
|
1,667
|
|
1,701
|
Commitments and
contingencies (Note 15)
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
Preferred stock,
$.001 par value; 7,001,671 shares authorized:
|
|
|
|
Series A:
1,000,000 shares allocated; no shares issued and
outstanding
|
-
|
|
-
|
Series B:
5,000,000 shares allocated; 59,065 shares issued and
outstanding
|
-
|
|
-
|
Series C:
1,000,000 shares allocated; no shares issued and
outstanding
|
-
|
|
-
|
Series D: 1,671
shares allocated; no shares issued and outstanding
|
-
|
|
-
|
Common stock,
$.001 par value; 192,998,329 shares authorized;
|
|
|
|
55,017,419 and
55,010,619 shares issued and outstanding
|
55
|
|
55
|
Additional
paid-in capital
|
83,151
|
|
82,788
|
Accumulated
deficit
|
(72,604)
|
|
(66,442)
|
|
|
|
|
Total
shareholders' equity
|
10,602
|
|
16,401
|
|
|
|
|
Total
liabilities and shareholders' equity
|
$
12,269
|
|
$
18,102
|
|
|
|
|
The accompanying
notes are an integral part of these consolidated financial
statements.
|
|
|
|
|
IsoRay, Inc. and
Subsidiaries
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Operations (unaudited)
|
|
|
|
|
|
|
|
|
(Dollars and
shares in thousands, except for per-share amounts)
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
|
June
30
|
|
June
30
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Product sales,
net
|
$
1,370
|
|
$
1,120
|
|
$
4,761
|
|
$
4,769
|
|
Cost of product
sales
|
872
|
|
1,168
|
|
3,923
|
|
4,640
|
|
Gross
profit
|
498
|
|
(48)
|
|
838
|
|
129
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development
|
|
|
|
|
|
|
|
|
Proprietary
research and development
|
283
|
|
143
|
|
771
|
|
528
|
|
Collaboration
arrangement, net of reimbursement (Note 15)
|
33
|
|
-
|
|
194
|
|
-
|
|
Total research
and development
|
316
|
|
143
|
|
965
|
|
528
|
|
Sales and
marketing
|
760
|
|
519
|
|
2,310
|
|
1,353
|
|
General and
administrative
|
1,285
|
|
1,000
|
|
3,918
|
|
3,786
|
|
Change in
estimate of asset retirement obligation (Note 9)
|
-
|
|
(456)
|
|
(48)
|
|
(456)
|
|
Total operating
expenses
|
2,361
|
|
1,206
|
|
7,145
|
|
5,211
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
(1,863)
|
|
(1,254)
|
|
(6,307)
|
|
(5,082)
|
|
|
|
|
|
|
|
|
|
|
Non-operating
income:
|
|
|
|
|
|
|
|
|
Interest
income
|
29
|
|
51
|
|
118
|
|
218
|
|
Change in fair
value of warrant derivative liability
|
-
|
|
18
|
|
27
|
|
154
|
|
Financing and
interest expense
|
-
|
|
-
|
|
-
|
|
(1)
|
|
Other income
(expense)
|
(20)
|
|
-
|
|
-
|
|
-
|
|
Non-operating
income, net
|
9
|
|
69
|
|
145
|
|
371
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
(1,854)
|
|
(1,185)
|
|
(6,162)
|
|
(4,711)
|
|
Preferred stock
dividends
|
(3)
|
|
(3)
|
|
(11)
|
|
(11)
|
|
|
|
|
|
|
|
|
|
|
Net loss
applicable to common shareholders
|
$
(1,857)
|
|
$
(1,188)
|
|
$
(6,173)
|
|
$
(4,722)
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted loss per share
|
$
(0.03)
|
|
$
(0.02)
|
|
$
(0.11)
|
|
$
(0.09)
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares used in computing net loss per share:
|
|
|
|
|
|
|
|
|
Basic and diluted
|
55,017
|
|
55,012
|
|
55,016
|
|
55,015
|
|
|
|
|
|
|
|
|
|
|
The accompanying
notes are an integral part of these consolidated financial
statements.
|
|
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SOURCE IsoRay, Inc.