Business update conference call to be held
October 27th at 10:00 a.m. Eastern time
Rosetta Genomics Ltd. (NASDAQ: ROSG), a leading developer and
provider of microRNA-based and other molecular diagnostics, today
reported financial results for the six months ended June 30,
2015.
Highlights for the first half of 2015 and recent weeks
include:
- Acquired CynoGen, Inc. (d/b/a
PersonalizeDx) from Prelude Corporation
- Launched seven high-value molecular
diagnostic tests year-to-date
- Presented positive performance data
from a validation study with the Company’s first-of-its-kind
thyroid nodule classification assay and launched RosettaGX Reveal™
at the International Thyroid Congress and Annual Meeting of the
American Thyroid Association
- Fortified the Company’s intellectual
property portfolio with four key U.S. patent allowances and two
international patent allowances
- Executed multiple strategic commercial
agreements, including:
- A network participation agreement with
MultiPlan for Rosetta’s healthcare services including the Rosetta
Cancer Origin Test™ and the entire suite of PersonalizeDx testing
and services to be available to MultiPlan’s participating members,
providers, payers and third-party administrators
- A partnership with FNApath to provide
centralized laboratory testing services for RosettaGX Reveal for
the classification of indeterminate thyroid nodules
- Strengthened balance sheet with an
aggregate of $16.7 million in net proceeds from the sale of
ordinary shares under the Controlled Equity OfferingSM Sales
Agreement with Cantor Fitzgerald & Co. and a private placement
of ordinary shares and warrants in October 2015
Management Commentary
"The first half of 2015 has been transformational for Rosetta
Genomics. Our acquisition of PersonalizeDx in April allowed us to
advance our strategic plan to broaden our differentiated and
proprietary content for use in personalized medicine, accelerate
revenue growth to achieve scale and improve efficiency in
delivering and distributing novel content. The acquisition has had
wide-ranging and positive financial, commercial, operational and
pipeline impact on Rosetta Genomics. The integration of
PersonalizeDx has been rapid and smooth, and we have benefitted
from the addition of many talented professionals who complement the
industry-leading team at Rosetta Genomics. Through the acquisition
we also gained a state-of-the-art, high-complexity CLIA laboratory
in Lake Forest, California, giving us fulfillment capabilities on
both coasts.
“In addition to the PersonalizeDx acquisition, we achieved a
number of important milestones during the first half of the year
that bolster our commercial offerings and protect our
industry-leading technology platforms. We have significantly
strengthened and expanded our patent portfolio, which protects our
global leadership position in microRNA technology and provides
opportunities to monetize certain assets. We launched seven new
molecular tests so far this year, which we expect will add to our
revenue base and enhance our leadership in molecular diagnostic
testing.
“We are particularly excited about the positive performance data
from our blinded validation study of RosettaGX Reveal for
classifying indeterminate thyroid nodules, as these data
demonstrate exceptional clinical performance much like we have seen
with microRNA-based testing in other areas. Also, our test is the
only currently available assay that can be run on very small
samples and smears. This flexibility, coupled with exceptional
clinical performance, should provide considerable competitive
advantage as we launch RosettaGX Reveal into a market valued at
$350 million annually in the U.S. alone. We believe RosettaGX
Reveal will quickly become an important product in our portfolio as
earlier market entrants have begun penetrating the market. We
estimate that the total converted market in 2015 for the molecular
classification of indeterminate thyroid nodules will be greater
than $50 million. Given the competitiveness of RosettaGX Reveal, we
believe we should be able to garner appreciable market share in
this growing market.
“We are pleased with our top-line results during the first half
of 2015, which reflect the contribution from the PersonalizeDx
acquisition and a 25% increase in revenues from Rosetta Genomics’
microRNA-based assays compared to the first half of 2014. We
continue to focus on accelerating demand for our testing services
and are working to upgrade our selling efforts. In addition, we
expect that our expanded reimbursement team will continue to
enhance both the amount and timing of payments for our testing
services.
“Lastly, throughout the balance of the year, we look forward to
building on the numerous achievements thus far in 2015 as we move
towards profitability and long-term value creation,” concluded Mr.
Berlin.
Financial results for the six months ended June 30, 2015
include:
- The Company recorded revenues from
continuing operations for the first half of 2015 of $2.3 million,
up 311% from revenues from continuing operations of $554,000 for
the first half of 2014.
- Pro forma consolidated revenues for the
first half of 2015 assuming a full six months of PersonalizeDx
operations were $4.2 million.
- Pro forma gross billings for the first
half of 2015 were $11.8 million (assuming a full six months of
PersonalizeDx operations), which included gross billings for the
PersonalizeDx business of $10.5 million. For the same period in
2014, Rosetta Genomics’ gross billings were $1.3 million.
- Cost of revenues for the first six
months of 2015 increased to $2.3 million from $770,000 a year
ago, primarily due to the acquisition of PersonalizeDx
leading to a higher volume of processed samples as well as
increases in personnel and infrastructure.
- Research and development expenses for
the first half of 2015 increased to $1.4 million from $1.0 million
for the first half of 2014, primarily due to increased activities
related to the development of the Company’s thyroid assay.
- Marketing and business development
expenses for the first half of 2015 increased to $4.1 million from
$3.4 million in the prior-year period due to a larger commercial
footprint as a result of the acquisition of PersonalizeDx.
- General and administrative expenses for
the first six months of 2015 were $3.6 million compared with $2.6
million for the same period in 2014, with the increase primarily
due to acquisition-related costs of the PersonalizeDx
business.
- The operating loss for the first half
of 2015 was $6.7 million, including $554,000 of non-cash
stock-based compensation expense as well as a gain of $2.4 million
from a bargain purchase related to the acquisition of
PersonalizeDx. This compares with an operating loss for the first
half of 2014 of $7.2 million, including $471,000 of non-cash
stock-based compensation expense.
- The net loss for the first six months
of 2015 was $6.7 million, or $0.49 per ordinary share on 13.6
million shares outstanding, compared with a net loss for the same
period in 2014 of $7.2 million, or $0.66 per ordinary share on 10.8
million shares outstanding.
- On a non-GAAP basis, excluding
stock-based compensation expense and the gain from the bargain
purchase, the net loss for the first six months of 2015 was $8.5
million, or $0.62 per ordinary share, compared with a net loss for
the first six months of 2014 of $6.7 million, or $0.62 per ordinary
share.
Balance Sheet Highlights
As of June 30, 2015, Rosetta Genomics had $14.5 million in cash
and cash equivalents, restricted cash and short- and long-term bank
deposits, compared with $15.6 million as of December 31, 2014. The
Company used approximately $8.4 million in cash to fund operations
during the first half of 2015, which included $2.0 million in cash
associated with the acquisition of PersonalizeDx. During the first
half of 2015, the Company raised net proceeds of $9.3 million from
the sale of approximately 2.2 million ordinary shares through a
Sales Agreement with Cantor Fitzgerald & Co. On October 16,
2015, Rosetta Genomics raised net proceeds of $7.4 million in a
private placement of units that consisted of common shares and
warrants. Given this recent raise and based on the Company’s
current operations and plans, Rosetta expects its current cash
position will take it into the first quarter of 2017.
Conference Call
Rosetta Genomics management will host a conference call on
October 27, 2015 beginning at 10:00 a.m. Eastern time to discuss
these financial results and recent corporate developments, and to
answer questions. Individuals interested in listening to the
conference call may do so by dialing (866) 239-5859 from within the
U.S. or (702) 495-1913 from outside the U.S. The conference ID
number is 63154375.
A telephone replay will be available through November 2, 2015 by
dialing (855) 859-2056 from within the U.S. or (404) 537-3406 from
outside the U.S., and entering the Conference ID number 63154375.
The webcast will be available for 30 days following the completion
of the call.
A live audio webcast of the call will also be available in the
"Investors" section of the Company's website at
www.rosettagenomics.com. An archived webcast will be available on
the Company's website for 30 days beginning approximately two hours
after the completion of the call.
Use of Non-GAAP Financial Measures
This press release contains certain non-GAAP financial measures.
A "non-GAAP financial measure" refers to a numerical measure of
historical or future financial performance, financial position or
cash flows that excludes (or includes) amounts that are included in
(or excluded from) the most directly comparable measure calculated
and presented in accordance with GAAP in the financial statements.
In this release, Rosetta provides non-GAAP gross billings, non-GAAP
net loss and non-GAAP net loss per share data as additional
information relating to its operating results. The presentation of
this additional information is not meant to be considered in
isolation or as a substitute for revenues, net loss or net loss per
share prepared in accordance with GAAP.
Pursuant to the requirements of Regulation G promulgated by the
SEC, the Company has provided a reconciliation of each non-GAAP
financial measure used in this earnings release and related
conference call or webcast to the most directly comparable
financial measure prepared in accordance with GAAP. This
reconciliation is presented in the tables below under the heading
"Reconciliation of GAAP to Non-GAAP Consolidated Statement of
Operation." Investors are encouraged to review these
reconciliations to ensure they have a thorough understanding of the
reported non-GAAP financial measures and their most directly
comparable GAAP financial measures.
Management uses these non-GAAP measures for internal reporting
and forecasting purposes. The Company has provided these non-GAAP
financial measures in addition to GAAP financial results because it
believes that these non-GAAP financial measures provide useful
information to certain investors and financial analysts for
comparison across accounting periods not influenced by certain
non-cash items that are not used by management when evaluating the
Company's historical and prospective financial performance.
About Rosetta Cancer Testing Services
Rosetta Cancer Tests are a series of microRNA-based and other
genomic diagnostic testing services offered by Rosetta Genomics.
The Rosetta Cancer Origin Test™ can accurately identify the primary
tumor type in primary and metastatic cancer including cancer of
unknown or uncertain primary (CUP). The Rosetta Lung Cancer Test™
accurately identifies the four main subtypes of lung cancer using
small amounts of tumor cells. The Rosetta Kidney Cancer Test™
accurately classifies the four most common kidney tumors: clear
cell renal cell carcinoma (RCC), papillary RCC, chromophobe RCC and
oncocytoma. RosettaGX Reveal accurately classifies indeterminate
thyroid nodules. In the U.S. alone, Rosetta Genomics estimates that
150,000 patients a year may benefit from the Rosetta Cancer Origin
Test™, 62,000 patients a year may benefit from the Rosetta Kidney
Cancer Test™, 222,000 patients a year may benefit from the Rosetta
Lung Cancer Test™ and 150,000 a year may benefit patients from
RosettaGX Reveal. The Company’s assays are offered directly by
Rosetta Genomics in the U.S., and through distributors around the
world. In addition to its proprietary products, the Company markets
the Rosetta Genomics OncoGxOne, OncoGxLung, PGxOne™ and EGFR and
KRAS tests for Admera Health. With the acquisition of
PersonalizeDx, the Company now offers a broader menu of molecular
and other assays for bladder, lung, prostate and breast cancer
patients. For more information, please visit
www.rosettagenomics.com. Parties interested in ordering any of
these tests can contact Rosetta Genomics at (215) 382-9000 ext.
309.
About Rosetta Genomics
Rosetta develops and commercializes a full range of
microRNA-based and other molecular diagnostics. Rosetta’s
integrative research platform combining bioinformatics and
state-of-the-art laboratory processes has led to the discovery of
hundreds of biologically validated novel human microRNAs. Building
on its strong patent position and proprietary platform
technologies, Rosetta is working on the application of these
technologies in the development and commercialization of a full
range of microRNA-based diagnostic tools. Through the acquisition
of PersonalizeDx, the Company offers core FISH, IHC and PCR-based
testing capabilities and partnerships in oncology and urology that
provide additional content and platforms that complement the
Rosetta offerings. Rosetta’s and PersonalizeDx’s cancer testing
services are commercially available through the Philadelphia, PA-
and Lake Forest, CA-based CAP-accredited, CLIA-certified labs,
respectively. For more information visit
www.rosettagenomics.com.
Forward-Looking Statement Disclaimer
Various statements in this release concerning Rosetta’s future
expectations, plans and prospects, including but not limited
to statements relating to the expected competitive advantages
of and potential market for Rosetta’s RosettaGX Reveal assay,
RosettaGX Reveal becoming an important product in Rosetta’s
portfolio, the ability of RosettaGX Reveal to garner appreciable
market share, and the ability of Rosetta to achieve profitability
and long-term value creation constitute forward-looking statements
for the purposes of the safe harbor provisions under The Private
Securities Litigation Reform Act of 1995. Actual results may differ
materially from those indicated by these forward-looking statements
as a result of various important factors, including those risks
more fully discussed in the "Risk Factors" section of Rosetta’s
Annual Report on Form 20-F for the year ended December 31,
2014 as filed with the SEC. In addition, any forward-looking
statements represent Rosetta’s views only as of the date of this
release and should not be relied upon as representing its views as
of any subsequent date. Rosetta does not assume any obligation to
update any forward-looking statements unless required by law.
CONDENSED INTERIM CONSOLIDATED BALANCE
SHEETS
U.S. dollars in thousands
June 30,
December 31,
2015 2014 Unaudited ASSETS
CURRENT ASSETS: Cash and cash equivalents $ 4,723 $ 7,929
Restricted cash 54 52 Short-term bank deposits 9,068
7,650
Trade receivables 5,016 338 Other accounts receivable and prepaid
expenses 560 483
Total current
assets 19,421 16
,452 LONG TERM ASSETS:
Property and equipment, net 3,265 822 Restricted bank deposit and
other long-term receivables 625 4
Total long term assets 3,890 826
Total assets $ 23,311 $ 17
,278
CONDENSED INTERIM CONSOLIDATED BALANCE
SHEETS
U.S. dollars in thousands (except share
and per share data)
June 30, December 31, 2015 2014
Unaudited LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES: Trade payables $ 1,367 $ 563 Other accounts
payables and accruals 2,117 1,648
Total current liabilities 3,484
2
,211 LONG-TERM LIABILITIES: Warrants
related to share purchase agreements 6 2
Total long-term liabilities 6
2 COMMITMENTS AND CONTINGENT
LIABILITIES SHAREHOLDERS EQUITY: Share capital: Ordinary
Shares of NIS 0.6 par value: 40,000,000 shares authorized at June
30, 2015 (Unaudited) and December 31, 2014; 14,502,942 (Unaudited)
and 11,765,678 shares issued at June 30, 2015 and December 31,
2014, respectively; 14,499,684 (unaudited) and 11,762,420 shares
outstanding at June 30, 2015 and December 31, 2014, respectively
2,254 1,830 Additional paid-in capital 147,179 136
,160
Accumulated deficit (129,612 ) (122,925 )
Total shareholders' equity 19,821
15
,065
Total liabilities and
shareholders' equity $ 23,311 $ 17
,278
CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF LOSS
U.S. dollars in thousands (except share
and per share data)
Six months ended
June 30,
2015 2014 Unaudited Revenues $
2,278 $ 554 Cost of revenues 2,269 770
Gross profit (loss) 9 (216 )
Operating expenses: Research and development, net 1,361
1,011 Marketing and business development 4,075 3,393 General and
administrative 3,643 2,620
Gain from bargain purchase related to
acquisition of CynoGen, Inc.
(2,352 ) - Total operating expenses
6,727 7,024 Operating loss 6,718
7,240 Financial income, net 41 64 Tax expenses 10
8 Net loss $ 6
,687 $ 7,184
Basic and diluted net loss per ordinary
share attributable to Rosetta Genomics' shareholders $ 0.49
$ 0.66 Weighted average number of ordinary shares
used to compute basic and diluted net loss per ordinary share
13,598,198 10,806,738
CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Six months ended
June 30,
2015 2014 Unaudited Cash flows
from operating activities: Net loss $ (6,687 ) $
(7,184 ) Adjustments to reconcile net loss to net cash used
in operating activities: Depreciation 293 158 Increase in trade
receivables (566 ) (220 ) Decrease in other accounts receivable and
prepaid expenses (73 ) (336 ) Stock-based compensation 544 471 Gain
from bargain purchase related to acquisition of CynoGen, Inc.
(2,352 ) - Change in fair value of warrants related to share
purchase agreement 4 (22 ) Increase (decrease) in trade payables 9
(154 ) Increase (decrease) in other accounts payable and accruals
436 (274 ) Net cash used in operating
activities (8,392 ) (7,561 )
Cash flows
from investing activities: Purchase of property and
equipment (108 ) (74 ) Investment in short-term bank deposits
(2,043 ) (3,003 ) Acquisition of CynoGen, Inc. (a) (2,000 ) -
Increase in restricted cash, net (2 ) (35 ) Net cash used in
investing activities (4,153 ) (3,112 )
Cash flows from financing activities: Issuance
of shares, net 9,339 2,956 Net
cash provided by financing activities 9,339
2,956 Decrease in cash and cash equivalents (3,206 )
(7,717 ) Cash and cash equivalents at beginning of period
7,929 16,774 Cash and cash equivalents
at end of period $ 4,723 $ 9,057
Supplemental
cash flow activities: (a)
Acquisition of
CynoGen, Inc. Fair value of assets acquired and
liabilities assumed at the date of acquisition: Working capital,
net (excluding cash and cash equivalents) $ 3,672 $ - Property and
equipment 2,629 - Gain from bargain purchase related to acquisition
of CynoGen, Inc. (2,352 ) - Issuance of shares, net (1,560 ) -
Commitment to issue shares (389 ) - $
2,000 $ - (b)
Supplemental disclosure of
non-cash activities: Share issuance for acquisition
of CynoGen, Inc. $ 1,560 $ - Commitment to issue
shares with respect to the Acquisition of CynoGen, Inc. $ 389
$ -
June 30, USD in
thousands 2015 2014 Net loss $
6,687 $ 7,184 Stock-based compensation 544 471 Gain from bargain
purchase related to acquisition of PersonalizeDx (2,352 )
non-GAAP net loss $ 8,495
$ 6,713 June 30, Basic and
diluted per share data 2015 2014
Net loss after discontinued operations $ 0.49 $ 0.66 Stock-based
compensation 0.04 0.04 Gain from bargain purchase related to
acquisition of PersonalizeDx (0.17 )
non-GAAP net
loss $ 0.62 $ 0.62
Weighted average number of Ordinary shares used to compute basic
and diluted net loss per Ordinary share 13,598,198 10,806,738
June 30, 2015 2014 Pro forma
revenues (2015 only) $ 4,181 $ 554 Unrecognized billings 7,645 761
Gross billings $ 11,826 $ 1,315
June 30, 2015
GAAP revenues $ 2,278 Additional revenues from PersonalizeDx for
non-consolidated period of January 1, 2015 - April 12, 2015 1,903
Pro forma revenues $ 4,181
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151026006616/en/
Company:Rosetta GenomicsKen Berlin, President & CEO,
(609) 419-9003investors@rosettagenomics.comorInvestor
Contacts:LHAAnne Marie Fields, (212)
838-3777afields@lhai.comorBruce Voss, (310)
691-7100bvoss@lhai.com
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