IMI announces first quarter financial results and provides operational update

IMI announces first quarter financial results and provides
operational update
- Lead cardiovascular test, PREVU(x) POC, made available for sale - Significant
new PREVU(x) study in life insurance testing industry - Pivotal study for
breast cancer test underway - Positioned to receive milestone payments later
this year 


TORONTO, May 11  /PRNewswire-FirstCall/ -- Predictive medicine company IMI
International Medical Innovations Inc. (TSX: IMI; Amex: IME) today announced
financial results for the first quarter of fiscal 2005 ended March 31, 2005.

"The first few months of 2005 have been highly successful, with a number of
achievements that will contribute to the long-term success of our
cardiovascular product family," said Dr. Brent Norton, President and Chief
Executive Officer. "Our first product, PREVU(x) Point of Care (POC) Skin Sterol
Test, was made available for sale to medical professionals in the United
States, Canada and select European markets. In addition, new data on PREVU(x)
presented in high-profile scientific and medical forums heightened the
visibility of our unique approach. Furthermore, we have realized a key
strategic objective with the start of the PREPARE (PREVU(x) Predicts
Atherosclerosis Risk and Events) clinical trial, a 25,000-patient study in the
life insurance testing industry using PREVU(x) LT Skin Sterol Test, the lab-
processed format of our technology. This study will generate valuable new data
on PREVU(x) LT, with interim results expected by early fall."

Dr. Norton continued, "Over the next few months, McNeil will continue to invest
in building the PREVU(x) brand. With supportive clinical data from the
insurance study, they expect to be in a position to launch PREVU(x) LT this
year, which will fulfill a central element of the strategy to have multiple
products available in different market segments at the same time. It also
positions us to receive other milestone payments from McNeil."

Dr. Norton also noted that IMI's cancer program is advancing with the start of
a pivotal study for the company's breast cancer screening test at the
University of Louisville. "The successful completion of this study will provide
the data needed to design a larger trial aimed at regulatory approval," he
said. "We are continuing to work towards finalizing a major study for our
colorectal cancer screening test, ColorectAlert(TM), and expect to have new
data on our lung cancer test, LungAlert(TM), later this summer."

  Operational Review

  Advancing commercialization of PREVU(x) Skin Sterol Test



During the first quarter McNeil made PREVU(x) POC Skin Sterol Test available
for sale to medical professionals in the U.S., Canada and select European
markets. McNeil is actively promoting PREVU(x) POC through a number of
innovative marketing programs, including eight medical conferences in major
world markets, where they are targeting cardiologists, and directly to specific
health care programs and providers. Additionally, McNeil continues to meet with
life insurance companies to prepare for the upcoming launch of PREVU(x) LT
later this year.

  Increased visibility of PREVU(x) POC with presentation of new clinical
  data



In March, new data was presented at the American College of Cardiology annual
meeting, showing the relationship between skin sterol and increased carotid
intima-media thickness (CIMT) in patients with no symptoms of disease. CIMT is
a marker of atherosclerosis and an independent predictor of heart attack and
stroke. This strong association with increased CIMT suggests that skin sterol
testing may help to identify asymptomatic patients who could benefit from more
intensive interventions.

Subsequent to quarter end, new data presented at the 6th Annual
Arteriosclerosis, Thrombosis and Vascular Biology conference, sponsored by the
American Heart Association, showed that patients with elevated skin sterol and
a high Framingham global risk score have a significantly higher risk of
multivessel disease. To date, an additional three scientific papers have been
accepted for publication in 2005.

Expanded patent protection for all products

IMI's market reach was broadened when a new patent related to the company's
process for quantifying color-change reactions in the presence of disease in
humans was granted by the Australian Patent Office. This color- reading system,
used throughout IMI's product line, is patent pending in key regions globally.
Additionally, IMI filed a new patent for an alternative format of the PREVU(x)
test, in keeping with its strategy to control and develop all relevant
technologies that could be applied to the company's tests.

Continuing to pursue re-instatement of two U.S. skin sterol patents

The U.S. Patent and Trademark Office (U.S. PTO) granted an extension for the
submission of IMI's request for consideration to accept unavoidably delayed
payments of maintenance fees for two U.S. patents related to IMI's skin sterol
technology. As disclosed in February, the U.S. PTO has asked for more
information regarding the credentials and procedures of IMI's patent agents and
their performance of clerical functions related to the payment of the
maintenance fees.

Business Outlook

"We have already achieved a number of important strategic objectives in the
year to date and have a positive outlook for the remainder of 2005," said Dr.
Norton. "Bringing a new product to market is a complex process in which several
variables come into play. McNeil has a proven track record of successfully
launching new products and dominating its chosen markets."

Dr. Norton continued, "Acceptance and excitement about PREVU(x) is growing.
While we expect to see sales build through late 2005 and 2006, McNeil will
determine the timing and volume of those sales. IMI's focus is on enhancing our
current technologies, further developing our cancer franchise and expanding our
product offering, all with a view to building the value of our business."

  Primary objectives for 2005 include:

  -   Starting a major U.S. colorectal cancer study with ColorectAlert(TM)
      led by a U.S. government-sponsored institution;
  -   Initiating a clinical trial directed at expanding PREVU(x)'s
      regulatory claims to screening for risk of heart attack;
  -   Developing an additional test format for PREVU(x);
  -   Seeking regulatory approval of PREVU(x) LT in Canada and Europe later
      this year; and
  -   Achieving milestone payments from McNeil.

  First Quarter Financial Review (in Canadian dollars)



Total product sales to McNeil were $12,000 for Q1 2005 compared with nil in Q1
2004. Subsequent to quarter end, in April 2005 product sales of $179,000 were
recorded that had been committed to by McNeil for Q1 2005. The invoice was
issued in Q1 and title had passed to McNeil in accordance with the license
agreements but delivery was deferred until April. As a result, the amount was
included in accounts receivable and deferred revenue on the balance sheet.
License revenue for Q1 2005 was $77,000 compared with $2,000 for Q1 2004. The
net loss for the quarter was $1,302,000 or $0.06 per share compared with a loss
of $1,083,000 or $0.05 per share for the quarter ended March 31, 2004 (Q1
2004).

Research and development expenditures for the quarter increased to $642,000
from $571,000 in Q1 2004. This variance reflects:

  -   an increase in stock-based compensation (a non-cash expense) of
      $30,000 compared with $20,000 for Q1 2004;
  -   an increase of $82,000 in spending on clinical trials for skin sterol
      and lung cancer; and
  -   a decrease of $47,000 in sub-contracted research expenses compared
      with Q1 2004.



General and administration expenses amounted to $764,000 compared with $521,000
in Q1 2004, an increase of $243,000. This variance reflects:

  -   an increase in stock-based compensation (a non-cash expense) of
      $65,000 to $99,000 compared with $34,000 for Q1 2004;
  -   an increase of $90,000 in professional fees for legal, audit and
      human resources, some of which related to legal expenses associated
      with IMI's petition to reinstate two U.S. skin sterol patents; and
  -   an increase of $60,000, reflecting additional consulting expenses for
      investor relations.



Amortization expenses for equipment and acquired technology amounted to $52,000
compared with $57,000 for Q1 2004. Purchases of equipment to support clinical
trials amounted to $82,000 during Q1 2005 compared with $73,000 in Q1 2004.

Interest income amounted to $29,000 compared with $28,000 for Q1 2004.
Refundable scientific investment tax credits accrued for Q1 2005 amounted to
$50,000 versus $37,000 for Q1 2004.

As at March 31, 2005 IMI had cash, cash equivalents and short-term investments
totaling $3,630,000 ($5,200,000 as at December 31, 2004). Cash used to fund
operating activities during Q1 2005 amounted to $1,730,000 compared to $834,000
in Q1 2004, which was affected by the reduction in accounts payable and accrued
liabilities by $466,000 during Q1 2005.

To date, IMI has financed its activities through product sales, license
revenues, the issuance of shares and the recovery of scientific research tax
credits (ITCs). Management believes that, based on historic cash expenditures
and the current expectation of further revenues from partnering activities,
product sales and royalties, its existing cash resources together with the ITCs
receivable of $439,000 will be sufficient to meet its current operating and
capital requirements until at least the second quarter of 2006.

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  Conference Call and Webcast

  IMI will hold a conference call and webcast tomorrow, May 12, 2005, at
  10 a.m. ET. To access the conference call, please dial [phone] in
  Toronto, or 1 [phone] elsewhere in North America. A live audio
  webcast will be available at http://www.imimedical.com/, and will be
subsequently
  archived for three months. To access the replay via telephone, which will
  be available until May 19, 2005, please dial [phone] or
  [phone] and enter the passcode 21124554 followed by the number
  sign.
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Financial statements are attached to this press release. IMI's Annual and
Special Meeting of Shareholders will be held at 10:30 a.m. (ET) on May 25, 2005
at the Toronto Stock Exchange Conference Centre, 130 King Street West, in
Toronto, Ontario. The event will also be webcast live at
http://www.imimedical.com/.

About IMI

IMI (http://www.imimedical.com/) is a world leader in predictive medicine,
dedicated to developing rapid, non-invasive tests for the early detection of
life-threatening diseases. IMI's cardiovascular products, which are branded as
PREVU(x) Skin Sterol Test, are marketed and distributed worldwide by McNeil
Consumer Healthcare, Canada. The company's cancer tests include
ColorectAlert(TM), LungAlert(TM) and a breast cancer test. IMI's head office is
located in Toronto, and its research and product development facility is at
McMaster University in Hamilton, Ontario. For information regarding PREVU(x),
please go visit http://www.prevu.com/.

This press release contains forward-looking statements. These statements
involve known and unknown risks and uncertainties, which could cause the
Company's actual results to differ materially from those in the forward-
looking statements. Such risks and uncertainties include, among others, the
lack of operating profit and availability of funds and resources to pursue R&D
projects, the successful and timely completion of clinical studies, the
successful development or marketing of the Company's products, reliance on
third-party manufacturers, the competitiveness of the Company's products if
successfully commercialized, the ability of the Company to take advantage of
business opportunities, uncertainties related to the regulatory process, and
general changes in economic conditions. In addition, while the Company
routinely obtains patents for its products and technology, the protection
offered by the Company's patents and patent applications may be challenged,
invalidated or circumvented by our competitors and there can be no guarantee of
our ability to obtain or maintain patent protection for our products or product
candidates.

Investors should consult the Company's quarterly and annual filings with the
Canadian and U.S. securities commissions for additional information on risks
and uncertainties relating to the forward-looking statements. Investors are
cautioned not to rely on these forward-looking statements. IMI is providing
this information as of the date of this press release and does not undertake
any obligation to update any forward-looking statements contained in this press
release as a result of new information, future events or otherwise.

  -------------------------------------------------------------------------
  IMI International Medical Innovations Inc.

  Incorporated under the laws of Canada
  -------------------------------------------------------------------------
  Consolidated Balance Sheets
  (in Canadian Dollars)
  As at March 31, 2005 and December 31, 2004
  -------------------------------------------------------------------------
                                                 March 31      December 31
                                                   2005           2004
  -------------------------------------------------------------------------
  ASSETS
  Current
  Cash and cash equivalents                    $    308,642   $    239,458
  Short-term investments                          3,321,215      4,956,945
  Accounts receivable                               228,407        222,348
  Inventory                                         273,702        267,500
  Prepaid expenses and other receivables            273,074        137,015
  Investment tax credits receivable                 439,000        389,000
  -------------------------------------------------------------------------
  Total current assets                            4,844,040      6,212,266
  -------------------------------------------------------------------------
  Capital assets, net of accumulated
   amortization of $615,318 (2004 - $581,155)       468,440        420,955
  Acquired technology, net of accumulated
   amortization of $802,542 (2004 -$784,399)        344,715        362,858
  -------------------------------------------------------------------------
                                               $  5,657,195   $  6,996,079
  -------------------------------------------------------------------------
  -------------------------------------------------------------------------
  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current
  Accounts payable                             $    844,780   $  1,021,086
  Accrued liabilities                               276,964        566,951
  Current portion of deferred revenue               485,675        306,900
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  Total current liabilities                       1,607,419      1,894,937
  -------------------------------------------------------------------------
  Deferred revenue                                2,527,575      2,604,300
  -------------------------------------------------------------------------
  Total liabilities                               4,134,994      4,499,237
  -------------------------------------------------------------------------
  Shareholders' equity
  Capital stock                                  24,404,722     24,192,321
  Contributed surplus                             1,443,057      1,328,187
  Warrants                                          200,000        200,000
  Deficit                                       (24,525,578)   (23,223,666)
  -------------------------------------------------------------------------
  Total shareholders' equity                      1,522,201      2,496,842
  -------------------------------------------------------------------------
                                               $  5,657,195   $  6,996,079
  -------------------------------------------------------------------------
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  IMI International Medical Innovations Inc.
  -------------------------------------------------------------------------
  Consolidated Statements of Loss and Deficit
                                                    Three months ended
                                               ----------------------------
                                                  March 31      March 31
                                                    2005          2004
  -------------------------------------------------------------------------
  REVENUE
  Product sales                                 $    12,359   $          -
  License revenue                                    76,725          1,725
  -------------------------------------------------------------------------
                                                     89,084          1,725
  Cost of product sales                              11,229              -
  -------------------------------------------------------------------------
  Gross Profit                                       77,855          1,725
  -------------------------------------------------------------------------
  EXPENSES
  Research and development                     $    642,486   $    571,110
  General and administration                        763,865        520,554
  Amortization                                       52,306         57,268
  -------------------------------------------------------------------------
                                                  1,458,657      1,148,932
  -------------------------------------------------------------------------
  RECOVERIES AND OTHER INCOME
  Investment tax credits                             50,000         37,000
  Interest                                           28,890         27,507
  -------------------------------------------------------------------------
                                                     78,890         64,507
  -------------------------------------------------------------------------
  Net loss for the period                        (1,301,912)    (1,082,700)

  Deficit, beginning of period                  (23,223,666)   (17,654,767)
  -------------------------------------------------------------------------
  Deficit, end of period                       $(24,525,578)  $(18,737,467)
  -------------------------------------------------------------------------
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  Basic and diluted loss per share             $      (0.06)  $      (0.05)
  -------------------------------------------------------------------------
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  Weighted average number of common shares
   outstanding                                   21,276,497     21,262,979
  -------------------------------------------------------------------------



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  IMI International Medical Innovations Inc.
  Consolidated Statements of Cash Flows
                                                    Three months ended
                                               ----------------------------
                                                  March 31      March 31
                                                    2005          2004
  -------------------------------------------------------------------------
  OPERATING ACTIVITIES
  Net loss for the period                      $ (1,301,912)  $ (1,082,700)
  Add item not involving cash
    Amortization                                     52,306         57,268
    Stock compensation costs included in:
      Research and development expense               30,321         20,182
      General and administrative expense             98,550         34,181
  Net change in non-cash working capital
   balances related to operations                  (532,221)       138,744
  Decrease in deferred revenue                      (76,725)        (1,725)
  -------------------------------------------------------------------------
  Cash used in operating activities              (1,729,681)      (834,050)
  -------------------------------------------------------------------------
  INVESTING ACTIVITIES
  Short term investments                          1,635,730      1,074,416
  Purchase of capital assets                        (35,265)       (73,004)
  -------------------------------------------------------------------------
  Cash provided by investing activities           1,600,465      1,001,412
  -------------------------------------------------------------------------
  FINANCING ACTIVITIES
  Issuance of capital stock, net                    198,400         10,868
  -------------------------------------------------------------------------
  Cash provided by financing activities             198,400         10,868
  -------------------------------------------------------------------------
  Net increase in cash and cash equivalents
   during the period                                 69,184       (178,230)
  Cash and cash equivalents
    - Beginning of period                           239,458         61,625
  -------------------------------------------------------------------------
    - End of period                            $    308,642   $    239,855
  -------------------------------------------------------------------------
  -------------------------------------------------------------------------
  Represented by
  Cash                                         $    308,642   $    239,855
  Cash equivalents                                        -              -
  -------------------------------------------------------------------------
                                               $    308,642   $    239,855
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DATASOURCE: IMI International Medical Innovations Inc.



CONTACT: Company Contact: Sarah Borg-Olivier, Director, Communications,

Ron Hosking, Chief Financial Officer, T: [phone],

, ; U.S. Investor

Contact: John Nesbett/Andrea Faville, The Investor Relations Group, T:

[phone], ,

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