WALTHAM, Mass.--(BUSINESS WIRE)--Interleukin Genetics, Inc. (OTCQB: ILIU) today announced financial and operational results for its fiscal fourth quarter and full fiscal year ended December 31, 2014.
“2014 was an important transition year that positions Interleukin for growth in 2015 and beyond,” said Dr. Kenneth S. Kornman, DDS, PhD, Chief Executive Officer of Interleukin. “Accomplishments during the year included the publication of further supportive scientific data for PerioPredict® and our cardiovascular disease test, the initial market test for PerioPredict®, and the completion of a $10 million financing that provides the support needed to expand our commercialization efforts for PerioPredict® and other testing services. During 2015, we will focus on adoption of PerioPredict® by employers of all sizes, both through direct engagement with employers and through insurance companies who may promote PerioPredict® as part of their insurance plans. We intend to enhance our internal marketing capabilities by leveraging partnering programs with groups that have a strong presence in our target markets.”
Dr. Kornman added, “In addition to PerioPredict®, we will also look to establish additional collaborations with pharmaceutical companies looking to utilize our proprietary genetic tests and highly efficient clinical laboratory services in their drug development processes, as we recently did with Isis Pharmaceuticals.”
Fourth Quarter 2014 Financial Results
Revenues for the quarter ended December 31, 2014, were $322,000, compared to $671,000 for the same period in 2013. This decrease is primarily attributable to less breakage revenue (deferred revenue recognized when, after the passage of time, test redemption is considered unlikely) and license fee income recognized in 2014 compared the same period in 2013. These decreases are largely due to the recognition in the quarter ended December 31, 2013 of breakage revenue from test kit sales made in the years ended December 31, 2009 and 2010, and of license fee income for the quarters ended June 30, September 30, and December 31, 2013, whereas breakage revenue and license fee income recognized in the quarter ended December 31, 2014 related to that quarter only.
Research and development expenses for the quarter ended December 31, 2014, were $176,000, compared to $212,000 for the same period in 2013. The decrease is primarily attributable to decreased compensation related to employee departures.
Selling, general and administrative expenses for the quarter ended December 31, 2014, were $1.4 million, compared to $2.0 million for the same period in 2013. The decrease is primarily attributable to decreased expenses related to the initial marketing activities for PerioPredict® that occurred in 2013, decreased consulting and professional expenses, decreased employee compensation, and lower sales commissions paid pursuant to the Merchant Network and Channel Partner Agreement with Amway Global.
Net loss for the quarter ended December 31, 2014, was $1.6 million, or $(0.01) per basic and diluted common share, compared to $1.9 million or $(0.02) per basic and diluted common share for the same period in 2013.
Cash and cash equivalents were $11.5 million as of December 31, 2014, which management believes is sufficient to fund the Company’s operations for at least the next twelve months.
Full Year 2014 Financial Results
Revenues for the year ended December 31, 2014, were $1.8 million, compared to $2.4 million for the year ended December 31, 2013. The change in total revenue is attributable to higher revenues in 2013 due to a promotion by Interleukin’s partner, Amway, resulting in a larger volume of pre-paid test kits returned for processing, partially offset by $309,348 of breakage revenue recognized in the year ended December 31, 2014, compared to $213,233 of breakage revenue recognized in the year ended December 31, 2013. In addition, Interleukin earned $150,923 of royalties for the year ended December 31, 2014, from its license agreement with ABGI, compared to $198,960 of royalties earned in the year ended December 31, 2013.
Research and development expenses for the year ended December 31, 2014, were $843,000 compared to $722,000 for the year ended December 31, 2013. The increase is primarily attributable to increased compensation related to employee annual salary performance increases as well as severance payments for departing staff.
Selling, general and administrative expenses were $5.8 million for the year ended December 31, 2014, compared to $6.6 million for the year ended December 31, 2013. The decrease is primarily attributable to decreased expenses related to initial marketing activities for the PerioPredict® test, decreased consulting and professional expenses and lower sales commissions paid pursuant to the Merchant Network and Channel Partner Agreement with Amway Global.
The net loss for the year ended December 31, 2014, was $6.3 million, or $(0.05) per basic and diluted common share, compared to a net loss of $7.1 million, or $(0.08) per basic and diluted common share for 2013.
Fourth Quarter 2014 and Recent Highlights
- Provided Expert Commentary Regarding Periodontology and Its Role in Personalized Medicine at Scientific and Industry Conferences: In March 2015, Dr. Kornman gave a presentation titled “The Role of Inflammation in Periodontal Disease and other Chronic Diseases,” which discussed the role of periodontitis in inflammation at the Polish Society of Periodontology’s Spring Seminar. At the National Health Policy Conference, sponsored by America’s Health Insurance Plans (AHIP) Dental Summit, he gave a presentation titled “The Medical-Dental Connections,” which covered the effects of moderate to severe periodontitis on whole body inflammation and its consequences, including certain diseases of aging such as cardiovascular disease.
- Presented Scientific Data at the 2015 IADR General Session & Exhibition: In March 2015, the Company presented a poster, titled “IL1 Genotype and Obesity Characteristics Interact to Influence,” at the 2015 International Association for Dental Research (IADR). The data demonstrated how risk patterns of IL-1 gene functional variants, shown to influence periodontal disease (PD) severity, affect the previously demonstrated association between PD progression and obesity characteristics in a longitudinal database. Interleukin believes that by identifying obese patients with risk patterns of IL-1 gene functional variants, dentists may be better able to identify patients who could potentially benefit from additional, or more frequent, dental cleanings and better oral health care.
- Executed Collaboration Agreements with Isis Pharmaceuticals: During the first quarter, Interleukin and Isis Pharmaceuticals entered into two collaboration agreements under which Interleukin will provide genetic testing services and kits to support two Isis clinical studies; a Phase 2 study evaluating ISIS-APO(a)Rx in patients with high lipoprotein(a), and a Phase 1 study evaluating ISIS 681257 in healthy volunteers with high Lp(a). Lp(a) is an independent risk factor for cardiovascular disease. The Isis collaboration is a key example of how Interleukin Genetics can work with pharmaceutical companies to employ complementary genetic tests designed to improve clinical outcomes.
- PerioPredict® Featured in Genome Magazine: In January 2015, an article, titled “Dentistry Gets Personalized,” was published online in Genome magazine. The article, which also appeared in the Fall 2014 print issue, includes an overview of Interleukin’s novel genetic test, PerioPredict®, and its utility in identifying a patient’s risk for severe periodontal disease based on the individual’s genetic profile as well as its role in advancing personalized medicine in dentistry.
- Successfully Completed $10 Million in Financing: In December, the Company entered into a Securities Purchase Agreement with various accredited investors to raise gross proceeds of approximately $5.0 million in a private placement financing. The syndicate was comprised of new and existing investors including two leading life sciences investment firms, New Enterprise Associates (NEA) and Bay City Capital. Separately, Interleukin entered into a venture loan and security agreement with Horizon Technology Finance Corporation under which the Company borrowed $5.0 million. Net proceeds from the private placement and loan will be used primarily to accelerate commercialization of Interleukin’s proprietary genetic tests, including PerioPredict®, and for general corporate and working capital purposes.
- Received the 2014 DrBicuspid Dental Excellence Award for PerioPredict®: In October 2014, PerioPredict® received the DrBicuspid Dental Excellence Award for “Best New Hygienist Product,” and Dr. Kornman was presented with the award at the 2014 American Dental Association (ADA) Annual Meeting. The Dental Excellence Awards are based on votes cast by more than 50,000 dental professionals and recognize the very best people, products and services that are helping to improve dental health. The votes are cast by members of the DrBicuspid.com professional community and DrBicuspid.com readers, and honor the best of what dentistry has to offer.
- Participated on a Panel of Thought Leaders in Dentistry at the 2014 American Dental Association Annual Meeting: In October 2014, Dr. Kornman took part in a panel, titled “Introducing Scientific Advances into our Clinical Practice,” focused on genetics as it relates to clinical dental practice.
Conference Call and Webcast Information
Interleukin Genetics, Inc. will host a live conference call and webcast today at 8:30 a.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’ lead products include its proprietary PerioPredict® genetic risk panel for periodontal disease and tooth loss susceptibility available through dentists, and the Inherent Health® Weight Management Genetic Test that identifies the most effective diet 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 Amendments (CLIA). For more information, please visit www.ilgenetics.com.
Certain statements contained herein are “forward-looking” statements, including statements that the Company intends to enhance its internal marketing capabilities by leveraging partnering programs, the Company will establish additional collaborations with pharmaceutical companies, that the Company believes that cash and cash equivalents as of December 31, 2014 is sufficient to fund the Company’s operations for at least the next twelve months, and that the net proceeds from the private placement and loan will be used primarily to accelerate commercialization of the Company’s proprietary genetic tests and for general corporate and working capital purposes. 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, 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.|
|Balance Sheet Data||December 31,||December 31,|
|Cash and cash equivalents||$||11,466,807||$||7,542,281|
|Total current assets||$||12,180,658||$||8,952,583|
|Total current liabilities||$||4,011,650||$||4,871,833|
|Total shareholders' equity/(deficit)||$||4,516,857||$||5,253,222|
|Total liabilities and shareholders' deficit||$||13,267,121||$||10,125,055|
|Statement of Operations Data||Three Months Ended Dec 31,||Twelve Months Ended Dec 31,|
|Genetic testing service revenue||$||298,543||$||424,401||$||1,641,490||$||2,168,744|
|Less Sales Allowance & Discount||-||-||-||-|
|Cost of Revenue||320,282||389,738||1,435,377||1,632,497|
|Gross profit (loss)||1,723||281,311||374,941||797,115|
|Operating costs and expenses:|
|Research and development||176,264||212,062||843,102||721,568|
|Selling, general and administrative||1,428,893||1,954,070||5,767,138||6,564,807|
|Amortization of intangibles||23,525||27,317||94,100||109,266|
|Total operating expenses||1,628,682||2,193,449||6,704,340||7,395,641|
|Loss from operations||(1,626,959||)||(1,912,138||)||(6,329,399||)||(6,598,526||)|
|Total other income and (expense), net||(10,824||)||8,153||(6,315||)||(459,407||)|
Loss from continuing operations before income taxes
|Loss from continuing operations||$||(1,637,783||)||$||(1,903,985||)||$||(6,335,714||)||$||(7,057,933||)|
Income from discontinued Operations, net of income taxes
Basic and diluted net (loss) income per common share from:
Weighted average common shares outstanding,basic and diluted