EX-99.1 2 dex991.htm PRESS RELEASE Press Release

EXHIBIT 99.1

 

Sontra Medical Reports Fourth Quarter and Fiscal Year 2004 Results and Business Update

 

FRANKLIN, Mass., February 16, 2005 — Sontra Medical Corporation (Nasdaq: SONT) announced today financial results for the fourth quarter and fiscal year ended December 31, 2004. For the three months ended December 31, 2004, the net loss applicable to common stockholders was $1,663,000, or $.08 per share, as compared to $2,794,000, or $.29 per share, for the same period in 2003. For the year ended December 31, 2004, the net loss applicable to common stockholders was $5,774,000, or $.34 per share, as compared to $6,156,000, or $.65 per share, in 2003. The Company completed a $4 million equity financing in December and ended the year with $9,515,000 in cash with no debt. The Company expects that its cash on hand will be sufficient to fund operations through at least June 2006.

 

Product Highlights:

 

SonoPrep(R) and Procedure Tray for Topical Lidocaine:

 

    Seven regional distributors with sales representatives covering approximately 70% of hospital market are now selling SonoPrep.

 

    Signed U.S. distribution agreement with VNUS Medical Technologies for the varicose vein market.

 

    A combined sales force of 100 representatives now promotes SonoPrep.

 

    SonoPrep featured in Time Magazine, Reader’s Digest, Popular Science, Health Magazine and Contemporary Pediatrics.

 

    Completed two successful clinical trials in pediatric patients, the largest immediate target market for SonoPrep.

 

Continuous Non-Invasive Glucose Monitoring System

 

    Completed successful human clinical trial and system reliably detected real time changes in glucose (correlation of 90%).

 

Transdermal Vaccination:

 

    Completed successful human trial at UMASS Medical Center demonstrating that SonoPrep facilitated the transdermal delivery of large antigenic proteins to induce an immune response.

 

“We have made significant progress rolling out the SonoPrep product for the $100 million topical lidocaine market and in the development of other transdermal products,” stated Thomas W. Davison, PhD, Sontra’s President and Chief Executive Officer. “We are working closely with our new SonoPrep distributors and expect to have full U.S. distribution in place as planned by June 2005. We have improved the accuracy and reliability of our continuous non-invasive glucose monitoring system and the results of our October 2004 human clinical study conducted at Vanderbilt University clearly demonstrated the potential of our enabling technology. In that study, our system was more accurate than the MiniMed implantable sensor and the Cygnus GlucoWatch, especially in the detection of hypoglycemia. We have refined our product strategy and are now developing a continuous glucose monitor for post-surgical intensive care. The hospital product is being developed in parallel with the home testing and physician diabetes management products. During 2005, we expect to complete product definition and begin product development so that we can commence pivotal FDA clinical studies and potentially launch the hospital product by the end of 2006.”


Dr. Davison added, “For transdermal vaccination, we expect to commence two additional human clinical studies during the first half of 2005, a hepatitis A vaccine study at UMASS Medical Center and a flu vaccine study at St. Louis University. Based on our initial clinical results, we are confident that the SonoPrep technology can address major health challenges of the $5 billion glucose testing market and the $3 billion vaccine market. We also believe we have the potential to change the existing transdermal drug delivery model and be the first company to deliver large molecular weight drugs through the skin.”

 

Conference Call Information

 

Sontra will host a live conference call and listen-only Webcast on Thursday, February 17, 2005 at 11 a.m. ET to provide a business update and discuss its fourth quarter and fiscal year 2004 financial results.

 

To participate in the conference call, please dial: 1-973-409-9259.

 

A listen-only Webcast and replay of the conference call are available at http://www.sontra.com.

 

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 has demonstrated strong results from its initial human clinical trials at leading universities and medical centers for several billion dollar market opportunities including the transdermal delivery of vaccines and large molecule drugs and continuous non-invasive glucose monitoring. Sontra is currently marketing the SonoPrep device and procedure tray for use with topical lidocaine to achieve rapid (within five minutes) skin anesthesia.

 

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 efficacy of the SonoPrep device in connection with diagnostics, vaccine delivery, glucose monitoring and transdermal drug delivery, the expected benefits, market opportunities, distribution and market acceptance of the SonoPrep device and technology, the expected size of the markets for the SonoPrep device and technology, Sontra’s expected ability to commercialize additional products, and Sontra’s business, research, marketing and distribution strategies and product development plans. 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: adverse results in product development, clinical trials, commercialization efforts, product distribution and market acceptance; difficulties or delays in obtaining regulatory approvals to market products resulting from development efforts; difficulties or delays associated with sources of regulatory-approved transdermal drugs and vaccines; failure to obtain and maintain patent protection for discoveries; commercial limitations imposed by patents owned or


controlled by third parties; dependence upon strategic partners and third-party distributors to develop, commercialize, market and sell products based on our work; the commercial success of products; and the requirement for substantial 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.

 

Contacts:

 

Sean Moran, Sontra Medical CFO

508-553-8850 ext 234

or

Evan Smith, CFA / Erica Pettit, Financial Dynamics

212-850-5606 / 212-850-5614

 

 


SONTRA MEDICAL CORPORATION

Consolidated Statements of Loss

 

    

For the Years Ended

December 31,


    For the Three Months Ended
December 31,


 
     2004

    2003

    2004

    2003

 

Product revenues

   $ 33,565     $ —       $ 18,811     $ —    

Licensing revenue

     —         1,500,000       —         —    

Total revenue

     33,565       1,500,000       18,811       —    

Cost of product revenue

     16,680       —         10,356       —    

Gross margin

     16,885       1,500,000       8,455       —    

Operating Expenses:

                                

Research and development

     3,039,450       2,265,519       974,665       782,528  

Selling, general and administrative

     2,423,806       1,740,555       731,845       552,625  

Total operating expenses

     5,463,256       4,006,074       1,706,510       1,335,153  

Loss from operations

     (5,446,371 )     (2,506,074 )     (1,698,055 )     (1,335,153 )

Interest income

     86,189       26,620       36,929       12,126  

Net loss

     (5,360,182 )     (2,479,454 )     (1,661,126 )     (1,323,027 )

Accretion of dividend and beneficial conversion feature on Series A Convertible Preferred Stock

     (413,901 )     (3,676,590 )     (1,449 )     (1,470,579 )

Net loss applicable to common shareholders

   $ (5,774,083 )   $ (6,156,044 )   $ (1,662,575 )   $ (2,793,606 )

Net loss per common share, basic and diluted

   $ (0.34 )   $ (0.65 )   $ (0.08 )   $ (0.29 )

Basic and diluted weighted average common shares outstanding

     16,763,798       9,467,912       19,840,477       9,719,192  

 

 


SONTRA MEDICAL CORPORATION

Consolidated Balance Sheets

 

     As of December 31,

 
     2004

    2003

 

Assets:

                

Current Assets:

                

Cash and cash equivalents

   $ 9,515,244     $ 4,868,933  

Accounts receivable

     16,821       1,500,000  

Legal settlement receivable

     250,000       —    

Inventory, net

     152,642       —    

Prepaid expenses and other current assets

     69,492       66,075  

Total current assets

     10,004,199       6,435,008  

Property and Equipment, at cost:

                

Computer equipment

     206,970       171,272  

Office and laboratory equipment

     492,377       405,285  

Furniture and fixtures

     14,288       14,288  

Manufacturing equipment

     182,210       144,695  

Leasehold improvements

     174,698       166,289  
       1,070,543       901,829  

Less-accumulated depreciation and amortization

     (655,242 )     (498,341 )

Net property and equipment

     415,301       403,488  

Other Assets:

                

Restricted cash

     38,997       48,746  

Other assets

     2,000       2,000  

Total assets

   $ 10,460,497     $ 6,889,242  

LIABILITIES AND STOCKHOLDERS’ EQUITY

                

Current Liabilities:

                

Accounts payable

   $ 358,530     $ 136,810  

Accrued expenses

     759,051       465,092  

Total current liabilities

     1,117,581       601,902  

Commitments

                

Stockholders’ Equity

                

Series A Convertible Preferred Stock, $0.01 par value, authorized 7,000,000 shares, issued and outstanding 73,334 shares at December 31, 2004 (preference in liquidation of $76,291) and 6,495,000 shares at December 31, 2003

     76,291       6,628,842  

Common stock, $0.01 par value, authorized 40,000,000 shares, issued and outstanding 21,935,732 shares at December 31, 2004 and 10,102,992 shares at December 31, 2003

     219,358       101,030  

Additional paid-in capital

     32,674,740       17,952,721  

Deferred stock-based compensation

     (244,912 )     (372,874 )

Accumulated deficit

     (23,382,561 )     (18,022,379 )

Total stockholders’ equity

     9,342,916       6,287,340  

Total liabilities and stockholders’ equity

   $ 10,460,497     $ 6,889,242