Interleukin Genetics Reports Second Quarter 2014 Financial Results

PerioPredict™ Commercial Rollout Ongoing; Encouraging Adoption Rates at “High-Reimbursement” Dental Offices

WALTHAM, Mass.--()--Interleukin Genetics, Inc. (OTCQB:ILIU) today issued financial and operational results for its fiscal second quarter ended June 30, 2014.

“The utilization of our PerioPredict™ genetic test in the dental office is progressing well as a result of the education approach we have used,” said Dr. Kenneth Kornman, Chief Executive Officer of Interleukin Genetics. “Adoption appears to be especially high at dental offices where ten or more patients have insurance plans that cover the test. This is important information for us to have as we continue our work supporting the education of dental offices about how to use the test to enhance dental preventative care. We continue to actively pursue new payer partners and work toward expanding the network of insurers who offer coverage for a risk-based preventative dental program.”

Dr. Kornman continued: “We are also pleased to report the publication of new study data demonstrating the ability of Interleukin’s proprietary Heart Health Genetic Test to accurately predict future cardiovascular events. These data, which were published in the Journal of the American College of Cardiology, build upon the body of scientific evidence that supports the use of the Heart Health test to inform and improve a physician’s clinical decision-making for patients with cardiovascular disease.”

Second Quarter 2014 Financial Results

Revenues for the quarter ended June 30, 2014 were $529,000, compared to $852,000 for the same period in 2013. The decline in total revenue is primarily attributable to higher revenues in the 2013 period due to a promotion, by our partner Amway, resulting in a larger volume of pre-paid test kits returned for processing. The decrease in genetic testing revenue was partially offset by breakage revenue related to unredeemed test kits recognized from deferred revenue and recorded in the second quarter of 2014, and increased royalty revenue.

Research and development expenses for the quarter ended June 30, 2014 were $216,000, compared to $188,000 for the same period in 2013. The increase is primarily attributable to increased compensation.

Selling, general and administrative expenses for the quarter ended June 30, 2014 were $1.5 million, compared to $1.6 million for the same period in 2013. The decrease is primarily attributable to decreased expenses related to marketing activities for our PerioPredict™ periodontal genetic test, decreased consulting and professional expenses and lower sales commissions paid to Amway Global as part of our Merchant Channel and Partner Store Agreement, partially offset by increased compensation expenses.

Net loss for the quarter ended June 30, 2014 was $1.6 million, or $(0.01) per basic and diluted common share, compared to $1.8 million or $(0.02) per basic and diluted common share for the same period in 2013.

Cash and cash equivalents were $4.2 million as of June 30, 2014.

Second Quarter 2014 Highlights

  • Published Scientific Data Demonstrating the Ability of Interleukin’s Proprietary Heart Health Genetic Test to Predict for Cardiovascular Disease in the Journal of the American College of Cardiology: In May, researchers from the University of California at San Diego reported (Tsimikas et al. 2014) that Interleukin’s IL-1 genetic test for heart disease was an independent predictor of coronary artery disease. In addition, patients who were positive for the IL-1 genetic test and were above the median level of oxidized blood phospholipids exhibited cardiovascular disease earlier and had worse 4-year event-free survival (death, myocardial infarction, stroke, and need for revascularization) compared with other groups.
  • Secured Approval in New York State to Offer PerioPredict™: In April, the Company announced receipt of conditional approval from the New York State Department of Health to offer, process and report the results of the PerioPredict™ Genetic Risk Test for periodontal disease. Conditional approval is obtained when no significant concerns are identified during review, is subject to demonstration of ongoing compliance with New York State regulations and standards, and is the approval designation prior to notification of full approval. The State of New York is the only U.S. state that requires an independent regulatory review process including technical validation with clinical utility for laboratory developed tests run within a CLIA certified laboratory. As a result of New York State approval the PerioPredict™ test is now available to dental providers and their patients in all 50 U.S. states.
  • Published Additional Evidence Supporting PerioPredict in Journal of Periodontal Research: In April, the Company announced publication of its research study titled “Association of interleukin-1 gene variations with moderate to severe chronic periodontitis in multiple ethnicities” in the Journal of Periodontal Research. Results of the study validated the PerioPredict™ genetic risk test in multiple ethnic populations and provided added value beyond the standard predictive risk factors for severe periodontal disease.

Conference Call and Webcast Information

Interleukin Genetics, Inc. will host a live conference call and webcast today at 4:30 p.m. EDT. To access the live call, dial 877-324-1976 (domestic) or 631-291-4550 (international). The live webcast will be available at the Investors section of the Company’s website, www.ilgenetics.com.

The webcast will be archived following the call at www.ilgenetics.com.

About Interleukin Genetics

Interleukin Genetics, Inc. (OTCQB: ILIU) develops and markets proprietary genetic tests for chronic diseases and health related conditions. The products empower individuals to prevent certain chronic conditions and manage their existing health and wellness through genetic-based insights with actionable guidance. Interleukin Genetics leverages its research, intellectual property and genetic panel development expertise in metabolism and inflammation to facilitate the emerging personalized healthcare market. The Company markets its tests through partnerships with health and wellness companies, healthcare professionals and other distribution channels. Interleukin Genetics’ flagship products include its proprietary PerioPredict™ genetic risk panel for periodontal disease and tooth loss susceptibility sold through dentists, and the Inherent Health Weight Management Genetic Test that identifies the most effective diet and exercise program for an individual based on genetics. Interleukin Genetics is headquartered in Waltham, MA and operates an on-site, state-of-the-art DNA testing laboratory certified under the Clinical Laboratories Improvements Act (CLIA). For more information please visit www.ilgenetics.com.

Certain statements contained herein are “forward-looking” statements, including statements related to the potential expansion of the network of insurers who offer coverage for a risk-based preventative dental program. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, those risks and uncertainties described in the Company’s annual report on Form 10-K for the year ended December 31, 2013, the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2014 and other filings with the Securities and Exchange Commission. The Company disclaims any obligation or intention to update these forward-looking statements.

INTERLEUKIN GENETICS, INC.
FINANCIAL HIGHLIGHTS
       
Balance Sheet Data June 30, December 31,

2014

2013

 
 
Cash and cash equivalents $ 4,191,356 $ 7,542,281
Total current assets $ 5,095,820 $ 8,952,583
Total assets $ 6,211,242 $ 10,125,055
 
Total current liabilities $ 3,935,143 $ 4,871,833
Total liabilities $ 3,935,143 $ 4,871,833
 
Total shareholders' equity $ 2,276,099 $ 5,253,222
 
Total liabilities and shareholders' equity $ 6,211,242 $ 10,125,055
 
 
Statement of Operations Data Three Months Ended June 30, Six Months Ended June 30,

2014

2013

2014

2013

Revenue:
Genetic testing service revenue $ 483,214 $ 849,422 $ 903,547 $ 1,332,785
Other   45,381   2,706   112,614   6,736
 
Total revenue 528,595 852,128 1,016,161 1,339,521
Cost of revenue   361,746   496,417   756,517   879,988
 
Gross profit 166,849 355,711 259,644 459,533
 
Operating costs and expenses:
Research and development 215,519 187,776 424,696 348,156
Selling, general and administrative 1,506,057 1,573,386 3,032,663 2,575,558
Amortization of intangibles   23,525   25,770   47,050   54,633
 
Total operating expenses   1,745,101   1,786,932   3,504,409   2,978,347
 
Loss from operations (1,578,252) (1,431,221) (3,244,765) (2,518,814)
- -
Total other income and (expense), net   1,605   (345,090)   3,599   (459,077)
Loss from operations
before income taxes (1,576,647) (1,776,311) (3,241,166) (2,977,891)
Benefit for income taxes   -   -   -   -
Net loss $ (1,576,647) $ (1,776,311) $ (3,241,166) $ (2,977,891)
 
 
Basic and diluted net loss per common share $ (0.01) $ (0.02) $ (0.03) $ (0.05)
Weighted average common shares outstanding,
basic and diluted   122,516,317   79,006,278   122,499,091   58,007,551

Contacts

Media:
Argot Partners
David Pitts, 212-600-1902
david@argotpartners.com
or
Investors:
Argot Partners
Susan Kim, 212-600-1902
susan@argotpartners.com

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Contacts

Media:
Argot Partners
David Pitts, 212-600-1902
david@argotpartners.com
or
Investors:
Argot Partners
Susan Kim, 212-600-1902
susan@argotpartners.com