TORONTO, March 29 /PRNewswire-FirstCall/ -- Predictive medicine company PreMD Inc. (TSX: PMD; Amex: PME) today announced audited financial results for the year ended December 31, 2006 and provided investors with an operating update and outlook for fiscal 2007.

"Last year, we made tremendous in-roads with the PREVU(x) product line of skin cholesterol tests including the expansion into new retail pharmacy chains; the Canadian and European approval of our second PREVU(x) test, PREVU(x) LT; and the compilation of data to support a new regulatory claim for PREVU(x) as a cardiovascular risk assessment test for future heart attacks and stroke," said Dr. Brent Norton, President and Chief Executive Officer of PreMD. "The transition of PREVU(x), since reacquiring the rights at the end of December, has gone smoothly. We established relationships with customers, suppliers and other key contacts and have made considerable progress on the implementation of third party logistics. Importantly, we are building momentum with our direct sales, specifically into the retail pharmacy segment. In this regard, we have further developed the relationship with Wal-Mart Quebec and advanced the collaboration with Medivon LLC who has been instrumental in expanding the affiliation with Costco while bringing PREVU(x) POC into additional retailers Winn-Dixie and Publix."

Dr. Norton continued, "looking ahead, we are in advanced discussions with potential marketing partners for PREVU(x) and are focused on increasing the market opportunity for the technology. In that regard, we plan to work closely with the FDA to provide the information the agency suggested surrounding our 510(k) submission for PREVU(x) LT. The life insurance segment of the market provides us with a tremendous opportunity. In addition, expanding the regulatory claim for PREVU(x) as a risk assessment test for risk of a future heart attack and stroke is another catalyst for growth. To this end, the investigators involved in the PASA study are analyzing the data and have prepared a manuscript for publication in a leading medical journal. The PASA data will also form the basis for a submission to the FDA for the expanded claim. We anticipate filing this submission during the second quarter."

"The data collected so far from the various on-going cancer studies is promising. These studies will define the performance characteristics of the technology in the early detection of lung, colorectal and breast cancer, three of the most common causes of cancer," said Dr. Norton. "Our portfolio of cancer screening products is attracting attention from potential partners and we believe there is an opportunity to capture great value from the work we have done in this area."

"In addition to the progress we have made with our technology and products, we have also engaged in discussions with the law firm that was previously responsible for managing our patent portfolio. Our discussions center around the U.S. Patent and Trademark Office's findings that two patents surrounding the skin tissue cholesterol technology lapsed as a result of the law firm's failure to use its established docketing procedures regarding payment of the maintenance fees. We have entered into talks and look forward to a resolution resulting in receiving a monetary settlement."

For the year ended December 31, 2006, PreMD reported total revenue of $3,335,000, consisting of $7,000 in product sales to McNeil, the Company's licensee through December 28, 2006, and $3,329,000 in license revenue. Upon termination of the agreements on December 28, 2006, the balance of the deferred revenues, representing the unamortized portion of the up-front payments received from the licensee, was recognized as license revenue. The revenue for the full year ended December 31, 2005 was $1,579,000, which consisted of $426,000 in product sales to McNeil and $1,153,000 in license revenue.

The consolidated loss for the year was $5,949,000 or $(0.27) per share compared with a loss of $4,990,000 or $(0.23) for the year ended December 31, 2005.

Interest on convertible debentures (issued on August 30, 2005) amounted to $678,000 in 2006 compared to $228,000 in 2005. The debentures bear interest at an annual rate of 7%, payable quarterly in either cash or stock. In 2006, $281,000 of the interest expense was paid in stock, rather than cash, compared with nil in 2005. Imputed interest of $820,000 (compared with $256,000 in 2005) represents the expense related to the accretion of the liability component at an effective interest rate of 12.75%.

Amortization expenses for equipment and acquired technology for 2006 amounted to $180,000 compared with $210,000 in 2005. Leasehold improvements in the research facilities and purchases of equipment to support administration, clinical trials and manufacturing amounted to $25,000 in 2006 and $130,000 in 2005. In addition, the PREVU(x) trademark was purchased from the former licensee of the skin cholesterol technology for $150,000. Amortization of deferred financing fees amounted to $139,000 for 2006 compared to $43,000 in 2005. The financing fees are amortized over the four-year life of the convertible debentures.

Recoveries of provincial scientific investment tax credits (ITCs) amounted to $200,000 compared with $198,923 in 2005. Interest income amounted to $265,369 compared with $173,130 for 2005.

At December 31, 2006, PreMD had cash, cash equivalents and short-term investments totaling $3,276,000. On March 28, 2007, PreMD announced that it had raised $3.9 million in a private placement with existing institutional investors. The Company believes that its current financial resources will be sufficient to meet the Company's current operating and capital requirement through 2008.

PreMD Inc. is a leader in predictive medicine, dedicated to developing rapid, non-invasive tests for the early detection of life-threatening diseases. PreMD's cardiovascular products are branded as PREVU(x) Skin Cholesterol Test. The company's cancer tests include ColorectAlert(TM), LungAlert(TM) and a breast cancer test. PreMD's head office is located in Toronto, Ontario and its research and product development facility is at McMaster University in Hamilton, Ontario. For further information, please visit www.premdinc.com.

This press release contains forward-looking statements. These statements involve known and unknown risks and uncertainties, which could cause the Company's actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, among others, the successful development or marketing of the Company's products, the competitiveness of the Company's products if successfully commercialized, the lack of operating profit and availability of funds and resources to pursue R&D projects, the successful and timely completion of clinical studies, product liability, reliance on third-party manufacturers, the ability of the Company to take advantage of business opportunities, uncertainties related to the regulatory process, and general changes in economic conditions.

In addition, while the Company routinely obtains patents for its products and technology, the protection offered by the Company's patents and patent applications may be challenged, invalidated or circumvented by our competitors and there can be no guarantee of our ability to obtain or maintain patent protection for our products or product candidates.

Investors should consult the Company's quarterly and annual filings with the Canadian and U.S. securities commissions for additional information on risks and uncertainties relating to the forward-looking statements. Investors are cautioned not to rely on these forward-looking statements. PreMD is providing this information as of the date of this press release and does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise.

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