Medical Ventures Corp.
TSX VENTURE : MEV

Medical Ventures Corp.

November 07, 2007 08:00 ET

Medical Ventures Reports Q3 2007 Results

RICHMOND, BRITISH COLUMBIA--(Marketwire - Nov. 7, 2007) - MEDICAL VENTURES CORP. (TSX VENTURE:MEV) announces the results of operations for the quarter ended September 30, 2007.

MEV's business highlights to date include:

- Submitted to the U.S. Food and Drug Administration the first two (of three) modules of a pre-market approval (PMA) application for coronary use of the Metricath Gemini® measure-and-treat catheter system. The modular application permits the company to submit manufacturing, testing and clinical information as each becomes available rather than in one distinct application package.

- Completed patient enrolment in the GAAME clinical trial. The multi-centre GAAME trial enrolled 144 patients with single coronary lesions. The Company is currently having the trial data collected and analyzed; the results for the first 112 patients will be submitted to the FDA as the final piece of the company's application to approve coronary use of the Metricath Gemini.

- Featured the Metricath Libra® arterial and in-stent measurement system in a pilot research presentation at the New Cardiovascular Horizons conference in New Orleans. The pilot study showed Metricath Libra to be effective for use in renal arteries (supplying the kidneys), as the study's results showed that Metricath measurements disclosed a large proportion of under-expanded stents. The study, authored by Dr. Raed Aqel of University of Alabama-Birmingham Hospital and Birmingham VAMC, measured stent dimensions in 20 renal lesions in 16 patients. In these cases, Metricath measurements showed 18 of the 20 lesions (90%) that appeared acceptable under normal imaging actually required additional treatment to achieve full stent expansion.

- Featured the Metricath Libra system in a live case at the Capital Cardiovascular Conference (C3) in Harrisburg, PA. Drs. Rajesh Dave and Stuart Pink of Pinnacle Health Heart and Vascular Institute demonstrated the use of Metricath to course registrants as a method to treat complex diffuse disease.

- Conducted beta launch activities with U.S. distribution partners for MEV's PeriPatch™ Aegis surgical buttress product. The product is in transfer from design to manufacturing in anticipation of a full market launch. The Aegis is intended for use primarily during gastric bypass (stomach stapling) and lung re-sectioning procedures.

"The Company's activity at recent cardiovascular conferences is very encouraging," said Medical Ventures' CEO, Paul Geyer. "Physicians who have experienced the clinical impact of Metricath are beginning to present their findings to describe the technology's benefits to their peers. Having Metricath profiled by practicing cardiologists at educational events such as these is a powerful way to raise awareness of the system among other practitioners.

"Furthermore, clinical evidence continues to build as to the need for careful sizing of stents and ensuring complete expansion, and this topic is seeing increased discussion at clinical forums," Mr. Geyer continued. "Dr. Aqel's study demonstrated to physicians who perform renal artery interventions that relying on angiographic estimates alone can lead to over-estimation of actual renal artery stent size, especially at the lesion site. We will continue to pursue active case evaluations and clinical supporters to increase adoption of Metricath as an effective and economical vascular measurement tool."

On October 1, 2007, Alexei Marko was appointed president and Chief Operating Officer and Chris Clark Chief Financial Officer. Paul Geyer will continue as Chief Executive Officer.

Mr. Geyer spoke of the management changes, saying: "Alexei is a tremendous leader. He has a passion for this industry and a vision for how to take this company forward that inspires a great deal of confidence. He has a proven aptitude for developing successful medical technologies, stemming from his strong background in engineering and his understanding of how to match unmet clinical needs with opportunity. His business operations experience within the medical device industry makes this a natural step for Alexei and for Medical Ventures."

Financial Information

Results for the three and nine months ended September 30, 2007 and 2006 follow:

Net Losses

The consolidated net loss for the three and nine month periods ended September 30, 2007 was $1,802,176 or $0.02 per share and $5,530,725 or $0.06 per share respectively as compared with a net loss of $1,313,469 or $0.02 per share and $3,525,979 or $0.05 per share for the comparative periods in 2006.

Revenues

Revenues for the three and nine month periods ended September 30, 2007, were $218,840 and $890,899 respectively. These amounts compare to $218,559 and $944,072 in the same periods in 2006.

Quarter-to-quarter revenues continue to be variable based on the sales cycle for our products. The Company experienced a reduced level of sales activity in hospitals over the summer as compared to Q2 2007.

Expenses

Total expenses for the three and nine month periods ended September 30, 2007 were $1,972,000 and $6,128,212, respectively, a substantial increase over expenses incurred in the comparative periods in 2006 of $1,466,917 and $4,218,227, respectively. The increase in expenses during the period relates principally to increased sales and marketing activities, increased costs associated with the GAAME trial and a $124,170 inventory write down in Q2 2007.

Cash Position

At September 30, 2007, the Company had cash and cash equivalents of $5,046,124 and working capital of $5,795,115, as compared to cash of $2,748,735 and working capital of $4,065,561 as at December 31, 2006.

Options to Directors and Officers

Medical Ventures also granted five-year stock options to directors of the Company during Q3 2007 as follows: 125,000 options exercisable at a price of $0.15 per share, and subsequent to the period end, granted 250,000 options to a director of the Company, exercisable at $0.14 per share; and granted 150,000 options to an officer of the Company, exercisable at $0.085 per share.

The following is a summary of MEV's Results of Operations and Financial Condition for the quarter ended September 30, 2007. Full financials are available on Sedar and at www.medical-ventures.com.



MEDICAL VENTURES CORP.
Interim Consolidated Balance Sheets
September 30, 2007 and December 31, 2006

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September 30, December 31,
2007 2006
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(Unaudited) (Unaudited)
ASSETS

CURRENT
Cash and cash equivalents $ 5,046,124 $ 2,748,735
Accounts receivable 310,941 201,082
Inventory (Note 5) 972,318 1,291,658
Prepaid expenses and deposits 45,583 88,188
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6,374,966 4,329,663
PROPERTY AND EQUIPMENT (Note 6) 1,391,167 956,894
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$ 7,766,133 $ 5,286,557
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LIABILITIES

CURRENT
Accounts payable and accrued liabilities $ 545,608 $ 208,702
Current portion of long-term debt (Note 7) 19,243 20,400
Current portion of repayable
contribution agreement (Note 8) 15,000 35,000
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579,851 264,102
LONG-TERM DEBT (Note 7) 449,209 160,889
REPAYABLE CONTRIBUTION AGREEMENT (Note 8) 384,874 368,591
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1,413,934 793,582
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SHAREHOLDERS' EQUITY

Share capital (Note 9) 28,835,081 21,607,856
Contributed surplus (Note 9) 948,280 785,556
Deficit (23,431,162) (17,900,437)
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6,352,199 4,492,975
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$ 7,766,133 $ 5,286,557
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MEDICAL VENTURES CORP.
Interim Consolidated Statements of Operations and Deficit

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Three month Nine month
period ended period ended
September 30, September 30,
2007 2006 2007 2006
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(Unaudited) (Unaudited) (Unaudited) (Unaudited)

SALES (Note 11) $ 218,840 $ 218,559 $ 890,899 $ 944,072
COST OF SALES 105,897 112,855 426,637 385,207
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GROSS PROFIT 112,943 105,704 464,262 558,865
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EXPENSES
Selling 801,805 440,762 2,054,124 1,129,040
General and
administration 504,988 635,611 1,742,898 1,789,344
Product development
and clinical trials 618,971 348,102 2,061,534 1,191,834

Inventory write down
(Note 5) - - 124,170 -
Amortization 46,236 42,442 145,486 108,009
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1,972,000 1,466,917 6,128,212 4,218,227
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LOSS BEFORE OTHER

INCOME (EXPENSES) (1,859,057) (1,361,213) (5,663,950) (3,659,362)
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OTHER INCOME (EXPENSES)
Interest income 59,689 50,885 141,769 142,574

Interest on
long-term debt (2,808) (3,141) (8,544) (9,191)
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56,881 47,744 133,225 133,383
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NET LOSS FOR
THE PERIOD (1,802,176) (1,313,469) (5,530,725) (3,525,979)
DEFICIT, BEGINNING
OF PERIOD (21,628,986) (14,628,985) (17,900,437) (12,416,475)
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DEFICIT,
END OF PERIOD $(23,431,162) $(15,942,454) $(23,431,162) $(15,942,454)
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BASIC AND DILUTED
LOSS PER SHARE $ (0.02) $ (0.02) $ (0.06) $ (0.05)
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WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OUTSTANDING 111,209,545 71,338,886 94,517,711 68,140,791
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MEDICAL VENTURES CORP.
Interim Consolidated Statements of Cash Flows

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Three month Nine month
period ended period ended
September 30, September 30,
2007 2006 2007 2006
--------------------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)

OPERATING ACTIVITIES
Net loss for the
period $(1,802,176) $(1,313,469) $(5,530,725) $(3,525,979)
Items not affecting
cash

Inventory write down - - 124,170 -
Amortization 46,236 42,442 145,486 108,009
Stock-based
compensation 44,770 78,236 138,528 168,578
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(1,711,170) (1,192,791) (5,122,541) (3,249,392)
Change in non-cash
operating assets and
liabilities

Accounts receivable (53,382) 25,914 (109,859) (175,050)

Inventory 5,570 (214,245) 141,218 (363,153)
Prepaid expenses and
deposits 48,883 50,029 42,605 102,935
Accounts payable and
accrued liabilities 30,018 89,879 336,906 119,410
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(1,680,081) (1,241,214) (4,711,671) (3,565,250)
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INVESTING ACTIVITY

Purchase of property
and equipment (492,665) (33,535) (525,807) (184,986)
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(492,665) (33,535) (525,807) (184,986)
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FINANCING ACTIVITIES
Increase in
long-term debt 298,911 - 298,911 -

Repayment of
long-term debt (1,548) (8,282) (11,748) (25,682)
Repayment of
repayable
contribution agreement (1,161) (219) (3,717) (1,398)

Proceeds from share
issuance, net of
costs - - 7,251,421 6,848,895

Proceeds from exercise
of stock options - - - 54,000
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296,202 (8,501) 7,534,867 6,875,815
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INCREASE (DECREASE)
IN CASH (1,876,544) (1,283,250) 2,297,389 3,125,579
CASH AND CASH
EQUIVALENTS,
BEGINNING OF PERIOD 6,922,668 5,629,769 2,748,735 1,220,940
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END OF PERIOD $ 5,046,124 $ 4,346,519 $ 5,046,124 $ 4,346,519
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About Medical Ventures Corp.

Medical Ventures Corp. is a medical device company dedicated to developing products that address clinical needs in the quickly growing vascular and surgical marketplace. MEV products help doctors treat a wide range of health concerns, including heart and vascular disease and obesity. The company develops and manufactures the Metricath® System catheter technology for use in angioplasty procedures, and PeriPatch™, a range of surgical tissue products. For more information, please visit www.medical-ventures.com.

Statements contained herein that are not based on historical or current fact, including without limitation statements containing the words "anticipates", "believes", "may", "continues", "estimates", "expects", and "will" and words of similar import, constitute "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions, both nationally and in the regions in which the Company operates; technology changes; competition; changes in business strategy or development plans; the ability to attract and retain qualified personnel; existing governmental regulations and changes in, or the failure to comply with, governmental regulations; liability and other claims asserted against the Company; and other factors referenced in the Company's filings with Canadian securities regulators. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company does not assume the obligation to update any forward-looking statements.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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