RICHLAND, Wash., Nov. 8, 2016 /PRNewswire/ -- IsoRay, Inc. (NYSE MKT: ISR), a medical technology company and innovator in seed brachytherapy and medical radioisotope applications for the treatment of prostate, brain, lung, head and neck and gynecological cancers, today announced its financial results for the first quarter of fiscal 2017, ended September 30, 2016.
Revenue for the first quarter was $1.08 million, a 14% decrease compared to $1.26 million revenue for the first quarter of fiscal 2016. The decrease in revenue is primarily due to the transition and training of the newly expanded sales and marketing team, which were largely hired in the fourth quarter of fiscal 2016. Prostate brachytherapy represented 89% of total revenue for the first quarters of both fiscal 2017 and fiscal 2016. Operating expenses were $1.62 million compared to $1.17 million in the first quarter of the last fiscal year. Increases in expenses are attributed to the significant increase in sales and marketing investments in personnel, website re-design, marketing collateral and consulting for market development of $0.25 million, an increase in quality, training and finance staff of $0.13 million and approximately $0.07 million in one-time expenses related to year-end public company costs. Operating loss was $1.57 million compared to a $1.09 million loss in the first quarter of fiscal 2016. IsoRay had cash, cash equivalents and certificates of deposit of $13.7 million as of September 30, 2016, and no debt. "The first quarter was a transition quarter for IsoRay as the Company focused on training new sales personnel and launching our new sales programs, collateral materials, branding and corporate website in advance of the important American Society for Radiation Oncology Conference (ASTRO) in late September," said Thomas LaVoy, Chairman and CEO. "During the quarter we also began the process to automate our manufacturing operations. When completed, which is expected by the end of the second quarter of fiscal 2018 (which ends on December 31, 2017), the resulting improvement in the efficiency of our manufacturing and production processes is expected to reduce our production costs and allow for significant expansion, when needed, with reduced additional overall costs to the Company. We also reached a settlement agreement for the securities lawsuit, with the costs covered by our directors and officers (D&O) insurance. Preliminary approval of the settlement by the presiding judge was granted in October, with final approval of all settlement terms and conditions to be considered at a scheduled court hearing in March 2017. While there was an uptick in expenses in the quarter, these were planned expenses and relate to costs for the new sales and marketing programs plus an additional investment in quality and training personnel to support the expanded and more aggressive market development efforts. In addition to these costs, there were a number of one-time items for new customer facing initiatives as well as customary year-end public company expenses." "At the ASTRO Conference, numerous positive developments for the brachytherapy industry were presented. A preliminary review of randomized trial outcomes for the ASCENDE-RT study for high risk patients indicated that combination treatment utilizing brachytherapy, external beam radiation and hormones together, had significantly improved long-term results over all other treatment options. In addition, the RTOG study 0232 randomized trial comparing mono-brachytherapy versus external beam and brachytherapy for intermediate risk patients, showed little or no difference in outcomes between the two treatments. This study was conducted by the Radiation Therapy Oncology Group which carries out large, multi-institutional studies to evaluate hypotheses in radiation oncology. The results of both these trials were encouraging for the brachytherapy industry and could provide the catalyst for a resurgence in growth for new brachytherapy treatment opportunities. We are also continuing to explore a number of other potential opportunities, including joint ventures, and remain supportive of independent research using Cesium-131 brachytherapy products in the other areas of the body that we are focused on."