WALTHAM, Mass. – November 15, 2016 – Interleukin Genetics, Inc. (OTCQB: ILIU) today announced financial results for its fiscal third quarter of 2016, ended September 30, 2016, and provided a corporate update.

“Interleukin Genetics continued to advance our commercial plan to drive market adoption of our Inflammation Management Program, which we recently relaunched as ILUSTRA™, that includes the genetic risk test (formerly known as PerioPredict®) that enables the identification and improved management of inflammation for individuals who may have a genetic predisposition to over-produce Interleukin-1 (IL-1), a key mediator of inflammation,” said Mark B. Carbeau, Chief Executive Officer of Interleukin Genetics.  “During the third quarter, our focus was on integrating our expanded team to drive our commercial strategy and refining our strategies in deploying our field sales force, which we believe resulted in increased awareness of, and interest in, the ILUSTRA program.”

“We are also excited about the demonstrated value of our IL-1 platform in cardiac disease.  The publication in The Lancet by our collaborator, Ionis Pharmaceuticals, reporting the utility of our technology in clinical studies of their drug candidate IONIS-APO(a)-LRX is further validation of the role of IL-1 genetics, and is consistent with impressive data we have generated in other collaborations. The strength and consistency of data on IL-1 in the cardiac area is very encouraging, and we are accelerating our efforts to drive value from these new applications of our platform.”

Third Quarter 2016 and Recent Highlights

  • Launched the ILUSTRA Inflammation Management Program: This program targets individuals at elevated risk for severe periodontitis due to a genetic tendency to over-produce inflammation. ILUSTRA is offered by employers and through select insurance carriers as an enhanced benefit that has potential to provide significant health and economic value by improving the management of chronic inflammation.
  • Showed in The Lancet publication that IL-1 genetic test patterns provide key genetic data in clinical studies: This prestigious publication showed the potential for IL-1 genetic variations to provide genetic insights that potentially inform clinical and commercial strategies for certain drugs for cardiac disease. The publication was focused on clinical results for Interleukin’s collaborator, Ionis Pharmaceuticals, that is intended, in part, to reduce the risk for secondary cardiovascular events in individuals with elevated lipoprotein a, referred to as Lp(a).
  • Published research that provides new evidence for role of IL-1 genetic variations in determining the impact of obesity on chronic inflammatory diseases: Interleukin’s paper in the Journal of Periodontology strongly supports the value of IL-1 genetics in amplifying the negative impact of obesity.
  • Appointed New Chief Commercial Officer and Director of Marketing: Stephan Toutain, with more than 25 years of commercial development, market access, and sales and marketing leadership in ultra-orphan drug and orphan oncology markets worldwide, was appointed Chief Commercial Officer.  Mary Hiter, who has launched multiple diagnostic, medical device and specialty pharmaceutical products over a 20-year career, was appointed Director of Marketing.
  • Signed an Agreement with Amway to Provide Interleukin’s PerioPredict Genetic Risk Test and Patient Engagement Platform: Interleukin Genetics is making PerioPredict (now ILUSTRA) available to Amway’s approximately 5,000 employees in the U.S. The combined program provides genetic insights to enable targeted treatment plans and deliver engaging personalized content tailored to maximize participant engagement.
  • Raised $5.6 Million in a Private Placement: The investment syndicate was composed of existing investors, including two leading life sciences investment firms, Bay City Capital and New Enterprise Associates (NEA), and Pyxis Innovations Inc., an affiliate of Alticor Inc. (parent company to Amway Corporation), as well as broad participation from the management team.

Third Quarter Ended September 30, 2016 Financial Results
Total revenue was $734,000 for the three months ended September 30, 2016 compared to $296,000 for the three months ended September 30, 2015. The change in total revenue is primarily attributable to contracted research projects recognized in Other revenue.

Research and development expenses were $418,000 for the three months ended September 30, 2016, compared to $412,000 for the three months ended September 30, 2015.

Selling, general and administrative expenses were $1.7 million for the three months ended September 30, 2016, compared to $1.4 million for the three months ended September 30, 2015.  The 19% increase is primarily attributable to recruiting fees and compensation related to new staff in sales and marketing and higher consulting costs partially offset by lower commissions related to our Merchant Network and Channel Partner Agreement with Amway Global and lower accounting fees.

The Company reported a net loss of $1,966,505, or ($0.01) per diluted share for the three months ended September 30, 2016, compared to a net loss of $2,025,510, or ($0.01) per share in the comparable period in 2015.

Nine Months Ended September 30, 2016 Financial Results
Total revenue was $2.3 million for the nine months ended September 30, 2016 compared to $1.1 million for the nine months ended September 30, 2015. The change in total revenue is largely attributable to contract research projects, partially offset by a decrease in kits returned for processing related to ABG’s promotional product bundle.

Research and development expenses were $1.4 million for the nine months ended September 30, 2016, compared to $979,000 for the nine months ended September 30, 2015. The 38% increase of $371,000 is primarily attributable to expenses related to Dr. Ken Kornman moving back to the R&D department in April 2015 as President and Chief Scientific Officer from his previous position as CEO. While he served as CEO, expenses generated by Dr. Kornman were recorded as selling, general and administrative expenses. The increase in research and development expenses was also partially due to increased compensation expense related to annual salary increases for existing staff and our patient engagement study.

Selling, general and administrative expenses were $4.7 million for the nine months ended September 30, 2016, compared to $4.6 million for the nine months ended September 30, 2015.  The 2% increase is primarily attributable to higher legal and consulting expenses partially offset by lower recruiting and patent fees as well as lower commissions related to our Merchant Network and Channel Partner Agreement with Amway Global.

The Company reported a net loss of $5,571,442, or ($0.03) per diluted share for the nine-month period ended September 30, 2016, compared to a net loss of $6,035,490, or ($0.03) per share in the nine-month period ended September 30, 2015.

As of September 30, 2016, the Company had cash and cash equivalents of $4.3 million. On July 29, 2016, the Company completed a private placement transaction with various accredited investors, raising gross proceeds of approximately $5.6 million. The Company also restructured its existing debt with Horizon Technology Finance Corporation to revise the timing of the principal payments due under the loan. The Company expects that its current cash and cash equivalents will be sufficient to support the Company’s operations into the second quarter of 2017.

 

Conference Call details

Tuesday, November 15th, 8:30 am Eastern Time,

Dial in (domestic):                        877-324-1976
Dial in (international):               631-291-4550
Conference ID:                              13333032

About the ILUSTRA Inflammation Management Program
The ILUSTRA Inflammation Management Program is designed to transform the management of inflammation. The program utilizes a genetic test to identify patients at elevated risk for developing severe periodontal disease due to a genetic tendency to over-produce inflammation. Such individuals may benefit from enhanced dental care to lower their systemic inflammatory burden by preventing and treating gingivitis and periodontitis. The program integrates educational outreach to the patient’s care team and provides reminders and content to patients to drive engagement. The ILUSTRA Inflammation Management Program is made available to employees in covered health plans under the supervision of a licensed dentist or physician. The ILUSTRA test is run solely in Interleukin’s CLIA-certified lab in suburban Boston. For more information, visit www.ILUSTRA.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 healthcare professionals, partnerships with health and wellness companies, and other distribution channels. Interleukin Genetics’ lead products include its proprietary ILUSTRA™ Inflammation Management Program 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 Laboratory Improvement Amendments (CLIA). For more information, please visit www.ilgenetics.com.
Forward-Looking Statements
Certain statements contained herein are “forward-looking” statements, including statements that cash and cash equivalents as of September 30, 2016, are sufficient to support operations into the second quarter of 2017, that individuals with genetic predisposition to over-produce IL-1 may benefit from enhanced dental care to prevent or treat periodontitis and thereby lower their systemic inflammatory burden, and that IL-1 genetic variations have the potential to inform clinical and commercial strategies for certain drugs for cardiac disease. 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, 2015, and other filings with the Securities and Exchange Commission. The Company disclaims any obligation or intention to update these forward-looking statements.

Investor Relations Contact:

Steve DiPalma
Interleukin Genetics, Inc.
(508) 654-4572
sdipalma@ilgenetics.com
Media Contact:
Jennifer Moritz
Zer0 to 5ive for Interleukin Genetics
(917) 748-4006
jmoritz@0to5.com