WALTHAM, Mass., April 18, 2017 (GLOBE NEWSWIRE) -- Interleukin Genetics, Inc. (OTCQB:ILIU), a life sciences company focused on the genetics of chronic inflammation, today announced financial and operational results for its fiscal fourth quarter and full fiscal year ending December 31, 2016.
“2016 was a pivotal year for Interleukin Genetics, as we generated compelling new data regarding the potential utility of our Interleukin-1 (IL-1) genetic platform in the development of new classes of drugs for cardiac disease, and management of patients who have suffered previous cardiac events,” said Mark B. Carbeau, Chief Executive Officer of Interleukin Genetics. “We believe our proprietary genetic patterns have potential to accelerate clinical development through more targeted patient recruitment and may help address important questions such as dose responses, side-effect profiles and pricing/reimbursement strategies. Commercially, we believe our test may assist clinicians in identifying patients more likely to respond to specific drug therapies. These scientific developments are potentially significant to the post-statin era of cardiovascular medicine, and in response to increased interest from potential partners, we have made our cardiovascular test program a major focus for the company by expanding efforts to build additional clinical evidence and by broadening business development outreach.”
The company reported at last month’s annual meeting of the American College of Cardiology results from The Ioannina Study that certain IL-1 genetic patterns together with elevated lipoprotein (a) predict recurrent atherosclerotic cardiac events. These results corroborate findings of an earlier study published in 2014 of patients treated at the Mayo Clinic. The company is advancing interest in this technology through potential collaborations with pharmaceutical and clinical testing companies.
“We also commercially advanced our ILUSTRATM Inflammation Management Program by building collaborations in target geographies with key employer coalitions and sales wins,” said Mr. Carbeau. “These relationships provide evidence of the business impact and help us refine program elements for future deployments. We add value through engagement and empowerment, and offer potential disease avoidance. Our near-term focus with ILUSTRA is to passionately support current ILUSTRA Program deployments and advance new customer relationships that expand the evidence base for this program’s effectiveness.”
To support this new strategic focus, Interleukin has secured $1 million in new financing in the form of a subordinated convertible note from Bay City Capital and Horizon Technology Finance Corporation. The Company has also restructured its existing debt facility with Horizon such that principal payments will be deferred, reducing Interleukin’s near-term cash requirements. In March, the Company announced that it was restructuring its work force to better utilize resources and align the organization to support the cardiovascular testing program, and to streamline its commercial strategy for the ILUSTRA Program.
The company filed its Annual Report on Form 10-K with the SEC on April 17, 2017, which provides additional details on this transaction and our business operations and strategy.
Scientific Highlights:
- Presented clinical data from “The Ioannina Study” at the 66th Annual Scientific Session & Expo of the American College of Cardiology (ACC 2017) in Washington, DC that demonstrates the ability of certain interleukin-1 (IL-1) genetic patterns together with elevated lipoprotein (a) (Lp(a)) to predict recurrent atherosclerotic cardiac events.
- Contributed to the key publication in The Lancet (September 21, 2016) providing strong evidence that the antisense drug IONIS-APO(a)-LRX is well tolerated and capable of achieving substantial reductions in Lp(a) concentrations in patients. The drug is intended, in part, to reduce the risk for secondary cardiovascular events in individuals with elevated Lp(a).
- Established that Interleukin-1 genetic variations influence obesity effect in periodontal disease progression, which was published in the Journal of Periodontology.
- Collaborated with Eleven Biotherapeutics, Inc. to demonstrate genetic stratification of drug response in IL-1 implicated eye disease.
ILUSTRA Commercialization
- Launched the ILUSTRA Inflammation Management Program, an enhanced benefit offered to employers that incorporates three components: 1) a simple yet technologically advanced genetic risk test; 2) targeted education to healthcare professionals to individualize care plans; and 3) an 18-month subscription to the ILUSTRA Engagement Platform, a digital program to support plan members and drive behavior change. The ILUSTRA brand reflects the expanded program positioning and replaces the PerioPredict® brand name.
- Forged a relationship with the Pittsburgh Business Group on Health (PBGH) to offer the ILUSTRA Inflammation Management Program to PBGH employer-members in the Pittsburgh area as part of a company’s enhanced employee benefits plan.
- Formed collaboration with Greater Philadelphia Business Coalition on Health to expand availability of the ILUSTRA Inflammation Management Program and to deploy program with first employer in Philadelphia region.
- Signed an agreement with Spang & Company to offer the ILUSTRA Inflammation Management Program to their employees and their families as an enhancement to the company’s employee benefits plan.
- Entered into a relationship with mPulse Mobile, a leader in mobile health engagement, to offer the ILUSTRA Inflammation Management Program to their employees as an enhancement to the company’s employee benefits plan.
- Entered into agreement to offer ILUSTRA Inflammation Management Program to approximately 5,000 Amway employees in U.S.
Fourth Quarter 2016 Financial Results
Revenues for the quarter ended December 31, 2016, were $228,000, compared to $366,000 for the same period in 2015. This decrease is primarily attributable to lower contract research revenue, fewer kits returned for processing related to the Access Business Group LLC’s (“ABG”) promotional product bundle program and reduced breakage revenue compared to the same period in 2015.
Research and development expenses for the quarter ended December 31, 2016, were $130,000, compared to $321,000 for the same period in 2015. The decrease is primarily attributable to lower compensation costs and lower patent related expenses during Q4 2016.
Selling, general and administrative expenses for the quarter ended December 31, 2016, were $1.4 million, compared to $1.2 million for the same period in 2015. The increase is primarily attributable to increased compensation and commercial expenses related to the ILUSTRA program.
Net loss for the quarter ended December 31, 2016, was $1.8 million, or $(0.01) per basic and diluted common share, compared to $1.9 million, or $(0.01) per basic and diluted common share, for the same period in 2015.
Full Year 2016 Financial Results
Total revenue was $2.5 million for the year ended December 31, 2016 compared to $1.4 million for the year ended December 31, 2015. The change in total revenue is largely attributable to contracted research projects, partially offset by a decrease in kits returned for processing related to ABG’s promotional product bundle and breakage revenue, which was $191,000 in the year ended December 31, 2016, compared to $218,000 of breakage revenue recognized in the year ended December 31, 2015. Royalty revenue from our license agreement with ABG was $199,000 for the year ended December 31, 2016, compared to $191,000 of royalties earned in the year ended December 31, 2015, partially offsetting the decrease in total revenue.
Research and development expenses were $1.5 million for the year ended December 31, 2016, compared to $1.3 million for the year ended December 31, 2015. The 14% increase of $181,000 is primarily attributable to expenses related to Dr. Kornman moving back to the R&D department in April 2015 as President and Chief Scientific Officer from his previous position as CEO. While he served as CEO, expenses generated by Dr. Kornman were recorded as selling, general and administrative expenses. The increase in research and development expenses was also partially due to increased compensation expense related to annual salary increases for existing staff and our patient engagement study.
Selling, general and administrative expenses were $6.1 million for the year ended December 31, 2016, compared to $5.9 million for the year ended December 31, 2015. The 3.3% increase is primarily attributable to higher legal fees and expenses related to the rebranding of the ILUSTRA Program partially offset by lower recruiting and patent fees as well as lower commissions related to our Merchant Network and Channel Partner Agreement with Amway Global.
The net loss for the year ended December 31, 2016, was $7.4 million, or $(0.04) per basic and diluted common share, compared to a net loss of $7.9 million, or $(0.05) per basic and diluted common share for 2015.
Cash was $2.7 million as of December 31, 2016, which management believes, together with the new capital and the restructured loan discussed above, is sufficient to fund the Company’s operations through the second quarter of 2017.
About Interleukin Genetics, Inc.
Interleukin Genetics, Inc. (OTCQB:ILIU) develops and markets proprietary genetic tests for chronic inflammatory diseases and health-related conditions, with significant expertise in metabolism and inflammation. Our tests provide information that is not otherwise available, to empower individuals and their healthcare providers to manage their health and wellness through genetics-based insights and actionable guidance, including pharmacogenomics information to guide development and use of therapeutics. Interleukin Genetics’ lead products include its proprietary ILUSTRA Inflammation Management Program, an integrated program that utilizes a simple genetic test to easily identify patients at elevated risk for developing severe periodontal disease due to a genetic tendency to over-produce inflammation; its cardiovascular test to guide treatment of high risk patients; and its Inherent Health® line of genetic tests. Interleukin Genetics is headquartered in suburban Boston and operates an on-site DNA testing laboratory certified under the Clinical Laboratory Improvement Amendments (CLIA). For more information, please visit www.ilgenetics.com.
Forward-Looking Statements
Certain statements contained herein are “forward-looking” statements, including, but not limited to, statements that our genetic test patterns have potential to accelerate clinical development or assist clinicians in patient management and statements about the potential clinical value of Interleukin’s genetic tests in other areas and how Interleukin intends to capture the value of these tests, the expected near term focus of Interleukin’s business and the expectation that Interleukin’s cash, together with the new capital and the restructured loan discussed above, is sufficient to fund operations through the second quarter of 2017. 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 Interleukin’s annual report on Form 10-K for the year ended December 31, 2016, and other filings with the Securities and Exchange Commission. Interleukin disclaims any obligation or intention to update these forward-looking statements.
| INTERLEUKIN GENETICS, INC. | |||||||||||||||||
| FINANCIAL HIGHLIGHTS | |||||||||||||||||
| Balance Sheet Data | December 31, | December 31, | |||||||||||||||
| 2016 | 2015 | ||||||||||||||||
| Cash and cash equivalents | $ | 2,657,214 | $ | 4,706,018 | |||||||||||||
| Total current assets | $ | 3,271,150 | $ | 5,695,533 | |||||||||||||
| Total assets | $ | 3,835,772 | $ | 6,491,520 | |||||||||||||
| Total current liabilities | $ | 5,551,228 | $ | 5,477,936 | |||||||||||||
| Total liabilities | $ | 6,681,322 | $ | 8,952,920 | |||||||||||||
| Total shareholders' equity/(deficit) | $ | (2,845,550 | ) | $ | (2,461,400 | ) | |||||||||||
| Total liabilities and shareholders' deficit | $ | 3,835,772 | $ | 6,491,520 | |||||||||||||
| Statement of Operations Data | Three Months Ended Dec 31, | Twelve months Ended Dec 31, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||||
| Revenue: | |||||||||||||||||
| Genetic testing service revenue | $ | 150,993 | $ | 234,369 | $ | 1,032,317 | $ | 1,155,980 | |||||||||
| Other | 76,868 | 131,279 | 1,481,139 | 284,930 | |||||||||||||
| Total revenue | 227,861 | 365,648 | 2,513,456 | 1,440,910 | |||||||||||||
| Less Sales Allowance & Discount | - | - | - | - | |||||||||||||
| Net revenue | 227,861 | 365,648 | 2,513,456 | 1,440,910 | |||||||||||||
| Cost of Revenue | 276,459 | 428,380 | 1,601,958 | 1,414,113 | |||||||||||||
| Gross profit (loss) | (48,598 | ) | (62,732 | ) | 911,498 | 26,797 | |||||||||||
| Operating costs and expenses: | |||||||||||||||||
| Research and development | 130,243 | 320,571 | 1,480,882 | 1,299,542 | |||||||||||||
| Selling, general and administrative | 1,369,018 | 1,247,223 | 6,070,746 | 5,878,940 | |||||||||||||
| Amortization of intangibles | 8,362 | 78,644 | 33,450 | 136,886 | |||||||||||||
| Total operating expenses | 1,507,623 | 1,646,438 | 7,585,078 | 7,315,368 | |||||||||||||
| Loss from operations | (1,556,221 | ) | (1,709,170 | ) | (6,673,580 | ) | (7,288,571 | ) | |||||||||
| Total other income and (expense), net | (286,435 | ) | (153,354 | ) | (740,519 | ) | (609,442 | ) | |||||||||
| Loss from continuing operations | |||||||||||||||||
| before income taxes | (1,842,656 | ) | (1,862,524 | ) | (7,414,099 | ) | (7,898,013 | ) | |||||||||
| Income taxes | - | - | - | - | |||||||||||||
| Loss from continuing operations | $ | (1,842,656 | ) | $ | (1,862,524 | ) | $ | (7,414,099 | ) | $ | (7,898,013 | ) | |||||
| Income from discontinued Operations, | |||||||||||||||||
| net of income taxes | - | - | - | - | |||||||||||||
| Net loss | $ | (1,842,656 | ) | $ | (1,862,524 | ) | $ | (7,414,099 | ) | $ | (7,898,013 | ) | |||||
| Basic and diluted net (loss) income per | |||||||||||||||||
| common share from: | |||||||||||||||||
| Continuing operations | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.05 | ) | |||||
| Discontinued operations | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||
| Net loss | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.05 | ) | |||||
| Weighted average common shares outstanding, | |||||||||||||||||
| basic and diluted | 229,381,059 | 172,887,221 | 197,089,020 | 172,813,224 | |||||||||||||