FRANKLIN, Mass., May 11 - Sontra Medical Corporation (Nasdaq: SONT) announced financial results today for the first quarter ended March 31, 2006. For the three months ended March 31, 2006, the net loss applicable to common stockholders was $1,229,000, or $.05 per share, as compared to $1,293,000 or $.06 per share, for the same period in 2005. The Company ended the quarter with a total of $4,323,000 in cash and short term investments.
"We have made steady progress in the development of our continuous glucose monitor for the hospital critical care market," stated Thomas W. Davison, PhD, Sontra's President and Chief Executive Officer. "A majority of Sontra's resources are focused on the development of this product. Glucose monitoring prototypes systems are currently being tested and validated at Sontra's in-house scientific laboratories. We have commenced enrollment in a clinical study consisting of patients with diabetes and healthy volunteers. The primary goals of the first study will be to evaluate the reliability of our glucose monitoring system and develop a glucose prediction algorithm that will be tested in a second hospital critical care study to be conducted at Tufts-New England Medical Center, the Boston Medical Center, Beth Israel Deaconess Hospital and Rhode Island Hospital. Intensive insulin therapy and frequent blood glucose testing to maintain tight glycemic control is one of the most exciting new trends in critical care medicine. The enormous clinical benefits include reducing mortality and severe complications by up to 50%. These benefits, combined with significant cost savings that come from reduced length of stay and less intervention, are expected to create a new market for critical care continuous glucose monitors that we estimate will exceed $1 billion."
About Sontra Medical Corporation (http://www.sontra.com)
Sontra Medical Corporation is a technology leader in transdermal science. Sontra's SonoPrep ultrasound-mediated skin permeation technology combined with technical competencies in transdermal drug formulation, delivery systems and biosensors is creating a new paradigm in transdermal drug delivery and diagnosis. The SonoPrep technology is being developed for several billion dollar market opportunities, including continuous glucose monitoring and the transdermal delivery of large molecule drugs and vaccines. Sontra is currently marketing the SonoPrep device and procedure tray for use with topical lidocaine to achieve rapid (within five minutes) skin anesthesia.
Investor Relations Contact:
Sean Moran, Sontra Medical CFO
508-530-0334
SonoPrep is a registered trademark of Sontra Medical Corporation. All other company, product or service names mentioned herein are the trademarks or registered trademarks of their respective owners.
This press release contains forward-looking statements, which address a variety of subjects including, for example, the expected technological advances and availability of the second-generation SonoPrep device, the expected benefits and efficacy of the SonoPrep device in connection with diagnostics, vaccine delivery, glucose monitoring and transdermal drug delivery, Sontra's expected ability to develop, market and sell products based on its technology, including a continuous transdermal glucose monitor for the hospital ICU market; the expected market opportunities, distribution and market acceptance of the SonoPrep device and technology; the expected size of the market for the continuous transdermal glucose monitor for the hospital ICU; and Sontra's business, research, product development, regulatory approval, marketing and distribution plans and strategies. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Such statements are based on our current expectations and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. The following important factors and uncertainties, among others, could cause actual results to differ materially from those described in these forward-looking statements: our technology is new and we may experience adverse results in research and development efforts, product development, clinical trials, product evaluations, commercialization efforts, product distribution and market acceptance; markets for our products may develop slower than expected, or not at all; our sales cycle is lengthy and we are still developing sales and marketing strategies which may or may not prove effective; the SonoPrep device may not prove effective in connection with diagnostics, vaccine delivery, glucose monitoring and/or transdermal drug delivery; we may experience difficulties or delays in obtaining regulatory approvals to market products resulting from development efforts or difficulties or delays associated with sources of regulatory-approved transdermal drugs and vaccines; failure to obtain and maintain patent protection for discoveries or commercial limitations imposed by patents owned or controlled by third parties would have an adverse effect on us; we depend upon strategic partners and third-party distributors to develop, commercialize, market and sell products based on our work; and we require substantial additional funding to conduct research and development and to expand commercialization, distribution and marketing activities. For detailed information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to Sontra's filings with the Securities and Exchange Commission, including Sontra's most recent Annual Report on Form 10-KSB. Forward-looking statements represent management's current expectations and are inherently uncertain. We do not undertake any obligation to update forward-looking statements made by us.
SONTRA MEDICAL CORPORATION
Consolidated Statements of Loss
(Unaudited)
Three Months Ended
March 31,
2006 2005
Revenue:
Product revenue $14,526 $116,053
Licensing revenue 12,501 -
Total revenue 27,027 116,053
Cost of product revenue 30,513 80,154
Gross (loss) profit (3,486) 35,899
Operating Expenses:
Research and development 763,358 906,300
Selling, general and administrative 495,061 473,809
Total operating expenses 1,258,419 1,380,109
Loss from operations (1,261,905) (1,344,210)
Interest income 39,318 53,030
Interest expense (5,154) -
Net loss (1,227,741) (1,291,180)
Accretion of dividend on Series A
Convertible Preferred Stock (1,447) (1,447)
Net loss applicable to common
shareholders $(1,229,188) $(1,292,627)
Net loss per common share, basic and
diluted $(0.05) $(0.06)
Basic and diluted weighted average
common shares outstanding 23,597,289 22,131,657
SONTRA MEDICAL CORPORATION
Consolidated Balance Sheets
As of,
March 31, December 31,
2006 2005
(Unaudited)
ASSETS:
Current Assets:
Cash and cash equivalents $2,023,187 $1,016,792
Short term investments 2,300,000 3,000,000
Accounts receivable 11,590 1,129
Inventory, net of reserve for obsolescence 49,010 31,250
Prepaid expenses and other current assets 104,320 65,468
Total current assets 4,488,107 4,114,639
Property and Equipment, at cost:
Computer equipment 245,365 241,324
Office and laboratory equipment 593,576 593,576
Furniture and fixtures 14,288 14,288
Manufacturing equipment 490,455 224,888
Leasehold improvements 177,768 177,768
1,521,452 1,251,844
Less -- accumulated depreciation and
amortization (933,943) (894,658)
Net property and equipment 587,509 357,186
Other Assets:
Restricted cash 19,949 29,248
Deposits and other assets 2,000 207,012
Total other assets 21,949 236,260
Total assets $5,097,565 $4,708,085
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $229,714 $210,208
Deferred revenue 32,499 45,000
Current portion of note payable 55,059 53,653
Accrued expenses 185,697 416,936
Total current liabilities 502,969 725,797
Note Payable, net of current portion 134,740 149,043
Commitments
Stockholders' Equity:
Series A Convertible Preferred Stock,
$0.01 par value, authorized 7,000,000
shares, issued and outstanding 73,334
shares at March 31, 2006 and December 31,
2005 (preference in liquidation of $77,738) 77,738 76,291
Common stock, $0.01 par value, authorized
60,000,000 shares, issued and outstanding
27,103,491 shares at March 31, 2006 and
22,261,830 shares at December 31, 2005 271,035 222,618
Additional paid-in capital 34,458,521 32,658,192
Deferred stock-based compensation - (4,159)
Accumulated deficit (30,347,438) (29,119,697)
Total stockholders' equity 4,459,856 3,833,245
Total liabilities and stockholders'
equity $5,097,565 $4,708,085
