Interleukin Genetics Inc. (AMEX:ILI) may be proving that going to the right college can get you ahead in life.
The Waltham, Mass.-based company more than doubled year-over-year revenue comparisons and cut its quarterly loss by more than half, posting a $1.4 million net loss on $573,000 in revenues during the three months ended June 30. Interleukin also beat analysts’ expectations with both its top- and bottom-line results.
The company benefited from rising sales of its Inherent Health line of genetic tests, particularly following the March 3 release of clinical data by Stanford University researchers supporting use of genetics tests to determine the proper weight-loss diet for individuals based on their specific genotype.
Interleukin also markets genetic tests for bone health, heart health and nutritional needs and during the quarter launched Wellness Select — combining all of its genetic tests in a single product.
Since the quarter ended, however, the company disclosed it received an inquiry from the Food & Drug Administration about the Inherent Health product line, with the July letter stating the test may fall under the agency’s definition of a medical device. Interleukin officials said August 12 they disagree with that assessment, supplying documents to the FDA backing up that assertion, but also warned the firm may eventually need to seek pre-market approvals in order to keep the tests in use at Clinical Laboratory Improvement Amendments-certified laboratories.
During the three months ended June 30, approximately 31 percent of revenues — or about $180,000 — were derived through a merchant network and channel partner agreement with Amway Corp., which sold Inherent Health products through a hyperlink on its website to the Interleukin e-commerce website.
Amway is a subsidiary of Alticor Inc., which owns just over 55 percent of Interleukin’s common stock. As recently as a year ago, Alticor was the source for nearly all of Interleukin’s revenues through various reimbursable research contracts.
Interleukin separately announced it would soon collaborate with the University of Michigan School of Dentistry on a clinical study of a genetic test to identify individuals at risk of periodontal disease. “This study may provide findings that could potentially lead to greater adoption and widespread reimbursement of our PST genetic test,” CEO Lewis Bender said in prepared remarks.
Interleukin officials also said they no longer expect to reach the $6 million threshold in shareholder equity needed to maintain its listing on the New York Stock Exchange’s AMEX board in time for a hearing later this month. The company has already withdrawn its appeal and will see its stock shifted Aug. 16 to the OTCQB marketplace, created in April to better distinguish securities that remain compliant with regulatory reporting requirements but do not meet listing criteria for other exchanges. The company will announce its new ticker symbol once it’s assigned.