Interleukin Genetics Reports Second Quarter 2015 Financial Results

Company to Host Conference Call Today at 8:30 a.m. ET

WALTHAM, Mass.--()--Interleukin Genetics, Inc. (OTCQB:ILIU) today announced financial and operational results for its fiscal second quarter of 2015, ended June 30, 2015.

“Interleukin Genetics is advancing on its mission to prevent and more cost-effectively manage chronic diseases,” said Mark B. Carbeau, Chief Executive Officer of Interleukin Genetics. “We have enhanced the positioning of PerioPredict®, our genetic test that identifies individuals with a life-long predisposition to produce inflammation, to target patients with chronic conditions such as diabetes and cardiovascular disease who will benefit from increased dental care. Engaging these high-risk Individuals provides significant leverage to improve wellness and lower costs, builds on the strong foundation of our relationships with collaborators and dental professionals, and is being well received by large employers and insurance carriers.”

Mr. Carbeau continued, “Another key area where we see potential untapped value is expanding the application of our expertise in interleukin-1 genetics to collaborate with pharmaceutical firms to support the development of drug candidates that block interleukin-1, as we have done in the cardiovascular disease (CVD) area, and develop companion diagnostics for these drugs, and to introduce additional risk-based tests that would benefit physicians in the clinical management of their patients.”

Second Quarter 2015 Highlights

PerioPredict®

  • Commercialization Initiatives Ongoing: Interleukin is continuing to work with its partner, Employee Benefits Consulting Group, or EBCG, to develop and implement prevention programs that target members at-risk for or diagnosed with diabetes, cardiovascular disease and other inflammatory mediated conditions who will benefit from increased dental preventive care.
  • Demonstration Programs: The Company is expanding its activities with medical and dental carriers to initiate demonstration programs that could lead to broader program adoption.

Osteoarthritis Genetic Test

  • Interleukin and New York University School of Medicine Entered into a License Agreement: The agreement, pertaining to a jointly owned U.S. patent application, No. 12/435,260, titled “Detecting Genetic Predisposition to Osteoarthritis Associated Conditions,” provides for the development and commercialization of the first genetic test of its kind to identify individuals at increased risk for progression of osteoarthritis (OA) and related complications, such as knee replacement. Interleukin believes its OA genetic test may provide physicians and pharmaceutical and medical device companies with novel genetic information to identify high-risk patients and develop personalized treatment options.
  • Received a Notice of Allowance Regarding a European Patent Application: The patent application, No. 09740020.4, titled “Detecting Genetic Predisposition to Osteoarthritis Associated Conditions,” relates to a method and kits for detecting a predisposition to, determining risk of, and guiding therapy for incident osteoarthritis, osteoarthritis progression, osteoarthritis severity, associated physical function decline and disability.

Weight Management Genetic Test

  • Two Late-Breaking Posters Presented by Interleukin’s Collaborators: At the 2015 Experimental Biology Annual Meeting, data from two important studies presented by Interleukin’s collaborators continue to enhance the Company’s understanding of the influence of genetics on both body composition and weight loss in response to particular diet and exercise programs. The studies provide preliminary findings suggesting that genetic variations may influence the response to macronutrients in the diet, and that individuals participating in a diet and exercise program may experience improvements in body composition and weight loss when the diet type is aligned with the patient’s genetic profile.
  • Poster Presentations Made at The International Society of Sports Nutrition Annual Meeting: Interleukin’s collaborators at Texas A&M University presented two posters concerning the effects of matching diet type to obesity-related genotype on body composition changes in women and the influence of matching diet type to obesity-related genotype on changes in visceral adipose tissue (VAT) in women during a six-month resistance-exercise training and walking program. The data reveal that participants following a more carbohydrate-restricted diet experienced significantly greater weight loss and slightly greater body composition changes. The findings also show that a low or very low carbohydrate, higher protein diet, along with resistance training and walking for six months, led to significantly reduced VAT mass, area, and volume.
  • Granted Key European Patent: The European patent, titled “Genetic Markers for Weight Management and Methods of Use Thereof,” has claims covering methods of determining a subject’s metabolic genotype and methods for selecting an appropriate therapeutic/dietary regimen or lifestyle recommendation based on the subject’s metabolic profile and susceptibility to adverse weight management issues. Corresponding patents have been granted in major markets throughout the world including Eurasia, Japan, Mexico, Russia and New Zealand, and patent applications are pending in the U.S. and other major markets.
  • Received a Grant Notice Regarding a Chinese Patent Application: The Chinese Patent Application, No. 200980127719.9, titled “Genetic Markers for Weight Management and Methods of Use Thereof,” relates to metabolic genotype body metabolism genes critical to establishing a patient’s personal weight loss plan.

Corporate

  • Mark B. Carbeau appointed Chief Executive Officer and Director: Mr. Carbeau, a transformative healthcare leader and entrepreneur, brings more than three decades of business expertise in the life sciences industry, with a proven track record of building high growth diagnostic and pharmaceutical businesses. Dr. Kenneth Kornman, who served as the President and CEO since August 2012, continues to serve as President, Chief Scientific Officer and Director.
  • Presented at the 2015 Marcum MicroCap Conference: Mr. Carbeau presented the Company’s story and investment thesis to investors at the 2015 Marcum MicroCap Conference in New York.

Second Quarter 2015 Financial Results

Total revenues for the second quarter ended June 30, 2015, were $376,000 compared to $529,000 for the same period in 2014. The change in total revenue is largely attributable to a decrease in the Company’s genetic test kits returned for processing related to the Company’s sales through Access Business Group’s promotional product bundle program.

Research and development (R&D) expenses for the second quarter ended June 30, 2015, were $385,000 compared to $216,000 for the same period in 2014. The increase is primarily attributable to increased compensation due to annual salary increases for existing staff, and other expenses relating to Dr. Kornman moving back into R&D expenses from selling, general and administrative (SG&A) costs in April 2015.

SG&A expenses for the second quarter ended June 30, 2015, were $1.7 million compared to $1.5 million for the same period in 2014. The increase is primarily attributable to expenses related to recruiting and hiring our new Chief Executive Officer and higher patent-related costs, partially offset by Dr. Kornman moving back into R&D.

Net loss for the second quarter ended June 30, 2015, was $2.2 million or $(0.01) per basic and diluted common share compared to $1.6 million or $(0.01) per basic and diluted common share for the same period in 2014.

Cash and cash equivalents at June 30, 2015, were $7.7 million, which management believes is sufficient to fund the Company’s operations for at least the next twelve months.

Conference Call and Webcast Information

Interleukin Genetics, Inc. will host a live conference call and webcast today at 8:30 a.m. EDT. To access the live call, please dial 877-324-1976 (domestic) or 631-291-4550 (international). The live webcast will be available and archived following the call at the Investors section of the Company’s website at www.ilgenetics.com.

About PerioPredict®

The PerioPredict® genetic test is quick, easy and painless and is performed under the direction of a dental professional during a routine exam or cleaning or as part of biometric screening. PerioPredict® measures variations in genes for Interleukin-1 (IL-1) to identify individuals with a life-long predisposition to overproduce inflammation to target patients with chronic conditions such as diabetes and cardiovascular disease who will benefit from increased dental care. PerioPredict® is run solely in the Interleukin Genetics CLIA-certified lab in Waltham, Mass. For more information, please visit www.PerioPredict.com.

About Interleukin Genetics

Interleukin Genetics, Inc. (OTCQB: ILIU) develops and markets proprietary genetic tests for chronic diseases and health-related conditions. The products empower individuals to prevent certain chronic conditions and manage their existing health and wellness through genetic-based insights with actionable guidance. Interleukin Genetics leverages its research, intellectual property and genetic panel development expertise in metabolism and inflammation to facilitate the emerging personalized healthcare market. The Company markets its tests through partnerships with health and wellness companies, healthcare professionals and other distribution channels. Interleukin Genetics’ lead products include its proprietary PerioPredict® genetic risk panel for periodontal disease and tooth loss susceptibility available through dentists, and the Inherent Health® Weight Management Genetic Test that identifies the most effective diet program for an individual based on genetics. Interleukin Genetics is headquartered in Waltham, MA, and operates an on-site, state-of-the-art DNA testing laboratory certified under the Clinical Laboratories Improvements Amendments (CLIA). For more information, please visit www.ilgenetics.com.

Forward-Looking Statements

Certain statements contained herein are “forward-looking” statements, including statements that there is potential value in expanding the application of the Company’s expertise in interleukin-1 genetics to collaborate with pharmaceutical firms to support the development of drug candidates that block interleukin-1, that the Company’s expanded activities with medical and dental carriers to initiate demonstration programs could lead to broader program adoption, that the Company’s genetic tests may provide physicians and pharmaceutical and medical device companies with novel genetic information to identify high-risk patients and develop personalized treatment options, and that cash and cash equivalents as of June 30, 2015, is sufficient to fund the Company’s operations for at least the next twelve months. 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 the Company’s annual report on Form 10-K for the year ended December 31, 2014, and other filings with the Securities and Exchange Commission. The Company disclaims any obligation or intention to update these forward-looking statements.

 
INTERLEUKIN GENETICS, INC.
FINANCIAL HIGHLIGHTS
                 
Balance Sheet Data June 30, December 31,

2015

2014

 
 
Cash and cash equivalents $ 7,691,919 $ 11,466,807
Total current assets $ 8,474,829 $ 12,180,658
Total assets $ 9,428,763 $ 13,267,121
 
Total current liabilities $ 3,736,555 $ 4,011,650
Total liabilities $ 8,510,021 $ 8,750,264
 
Total shareholders' equity/(deficit) $ 918,742 $ 4,516,857
 
Total liabilities and shareholders' deficit $ 9,428,763 $ 13,267,121
 
 
Statement of Operations Data Three Months Ended June 30, Six Months Ended June 30,

2015

2014

2015

2014

Revenue:
Genetic testing service revenue $ 324,837 $ 483,214 $ 672,737 $ 903,547
Other   51,214     45,381     106,526     112,614  
Total revenue 376,051 528,595 779,263 1,016,161
Less Sales Allowance & Discount   -     -     -     -  
Net revenue 376,051 528,595 779,263 1,016,161
Cost of Revenue   331,555     361,746     662,596     756,517  
 
Gross profit (loss) 44,496 166,849 116,667 259,644
 
Operating costs and expenses:
Research and development 384,538 215,519 567,068 424,696
Selling, general and administrative 1,655,226 1,506,057 3,218,017 3,032,663
Amortization of intangibles   19,414     23,525     38,828     47,050  
 
Total operating expenses   2,059,178     1,745,101     3,823,913     3,504,409  
 
Loss from operations (2,014,682 ) (1,578,252 ) (3,707,246 ) (3,244,765 )
 
Total other income and (expense), net   (152,104 )   1,605     (302,735 )   3,599  
Loss from continuing operations
before income taxes (2,166,786 ) (1,576,647 ) (4,009,981 ) (3,241,166 )
Income taxes   -     -     -     -  
Loss from continuing operations $ (2,166,786 ) $ (1,576,647 ) $ (4,009,981 ) $ (3,241,166 )
Income from discontinued Operations,
net of income taxes   -     -     -     -  
Net loss $ (2,166,786 ) $ (1,576,647 ) $ (4,009,981 ) $ (3,241,166 )
 
Basic and diluted net (loss) income per
common share from:
Continuing operations $ (0.01 ) $ (0.01 ) ($0.02 ) ($0.03 )
Discontinued operations   0.00     0.00     0.00     0.00  
Net loss $ (0.01 ) $ (0.01 )   ($0.02 )   ($0.03 )
Weighted average common shares outstanding,
basic and diluted   172,786,907     122,516,317     172,762,366     122,499,091  
 

Contacts

Investor Relations:
Argot Partners
Michelle Carroll/Susie Kim
212-600-1902
michelle@argotpartners.com
susie@argotpartners.com

Contacts

Investor Relations:
Argot Partners
Michelle Carroll/Susie Kim
212-600-1902
michelle@argotpartners.com
susie@argotpartners.com