Rosetta Genomics Ltd. (NASDAQ:ROSG), a leading developer and
provider of microRNA-based and other molecular diagnostics, today
reported financial results for the three and nine months ended
September 30, 2015.
Highlights for the third quarter of 2015 and recent weeks
include:
- Launched RosettaGX Reveal™, a
first-of-its-kind, microRNA-based thyroid nodule classification
assay, at the International Thyroid Congress and Annual Meeting of
the American Thyroid Association.
- Presented positive performance data
from a multi-center validation study of the Company’s thyroid
nodule classification assay.
- Partnered with FNApath to provide
centralized laboratory testing services for RosettaGX Reveal for
the classification of indeterminate thyroid nodules.
- Appointed Maria Fe Paz, M.D., an
accomplished medical executive in molecular diagnostics and
precision medicine, as interim Chief Medical Officer.
- Strengthened the Company’s balance
sheet with $7.4 million in net proceeds from a private placement of
ordinary shares and warrants.
- Granted allowance for a U.S. patent for
the prognosis and treatment of prostate cancer.
- Expanded the Company’s high-value
molecular diagnostics offering with the launch of OncoGxLung™ and
BRAF assays.
Management Commentary
“During recent months we continued to make meaningful progress
integrating the PersonalizeDx acquisition, growing top-line
results, expanding our high-value molecular diagnostics offerings
with important product launches, upgrading our sales and
reimbursement infrastructure and strengthening our balance sheet,”
stated Kenneth A. Berlin, President and Chief Executive Officer of
Rosetta Genomics.
“The third quarter of 2015 was the first full quarter of
PersonalizeDx being part of Rosetta Genomics and we had strong
revenue growth from our two lines of business, namely solid tumor
testing services and urologic cancer testing services.
“Throughout the third quarter and recent weeks we have been
focused on the preparation and launch of RosettaGX Reveal, our
microRNA-based assay for the classification of indeterminate
thyroid nodules. We are particularly excited about the positive
performance data from our blinded validation study of RosettaGX
Reveal as these data demonstrate exceptional clinical performance
when compared with the current market leader. The ability to run
RosettaGX Reveal on cytology slides is important because working
off the same slides created to perform the initial diagnoses
eliminates the inconvenience and risks associated with additional
fine needle passages into the patient’s neck that are required by
other assays. We have already begun to receive and process
commercial samples at our Philadelphia laboratory and have reported
our results on these first orders with very positive feedback from
clinicians. Moving forward, our plan is to leverage our solid tumor
sales force as well as a dedicated group of thyroid sales
specialists to call on endocrinologists and cytopathologists to
form a third business segment with high-growth potential. Given its
high negative predictive value, health economic benefit and added
convenience of working on cytology slides, we expect RosettaGX
Reveal to gain significant traction into a market valued at $350
million annually in the U.S.
“When issued, our new U.S. patent in prostate cancer will
fortify our leadership in microRNA technology and expand our
footprint in urological cancers. Through PersonalizeDx we offer
FISH, IHC and PCR-based testing capabilities in urologic and other
cancers, which provide content and platforms that complement our
microRNA offerings to provide clinicians with valuable information
to guide treatment decisions. This patent is important as this
biomarker, which is over-expressed in primary prostate tumors,
could be used as both a prognostic tool and as a therapeutic target
for prostate cancer. We continue to explore opportunities to
monetize our broad intellectual property portfolio in
microRNA-based diagnostics and therapeutics.
“We were particularly pleased with the recent Clinical Lab Fee
Schedule (CLFS) posted by the Centers for Medicare and Medicaid
Services (CMS) for 2016, which reverses some of the unfavorable
features of the original CLFS draft proposal. Importantly, the
final fees provide a long overdue correction to FISH reimbursement,
which includes a 92% increase in allowable reimbursement for our
most common solid tumor FISH procedures, which account for
approximately 20% of our current testing revenue. These and other
favorable fee schedules are encouraging and should continue to
enhance both the amount and timing of payments for our testing
services in 2016.
“As we look toward 2016, Rosetta Genomics is fundamentally
stronger and better positioned for success, and we look forward to
achieving a series of value-creating milestones,” concluded Mr.
Berlin.
Financial results for the three months ended September 30,
2015 include:
- The Company recorded revenues from
continuing operations for the third quarter of 2015 of $2.4
million, up 790% from revenues from continuing operations of
$273,000 for the third quarter of 2014 and up 17% from pro forma
revenues from continuing operations of $2.1 million for the second
quarter of 2015.
- Revenue from solid tumor testing
services in the third quarter of 2015 increased 319% to $1.1
million from $273,000 in the third quarter of 2014 and increased
16% from pro forma revenues from solid tumor testing services of
$983,000 in the second quarter of 2015. Within solid tumor testing
services, the Company’s Cancer Origin Test posted revenue of
$346,000, a 27% increase compared with $273,000 in the third
quarter of 2014, and a 5% increase compared with $329,000 in the
second quarter of 2015.
- Revenue from urologic cancer testing
services in the third quarter of 2015 was $1.3 million, a 17%
increase compared with pro forma urologic cancer testing services
revenues of $1.1 million in the second quarter of 2015. Prior to
the PersonalizeDx acquisition in April 2015, Rosetta Genomics did
not have revenue from urologic cancer testing services so there is
no comparison with the prior-year’s third quarter.
- Gross billings for the third quarter of
2015 were $7.5 million compared with gross billings of $644,000 in
the third quarter of 2014.
- Cost of revenues for the third quarter
of 2015 were $2.2 million compared with $377,000 for the same
period in 2014.
- Research and development expenses for
the third quarter of 2015 increased to $586,000 from $482,000 in
the third quarter of 2014.
- Marketing and business development
expenses for the third quarter of 2015 were $1.7 million compared
with $1.6 million in the year-ago period.
- General and administrative expenses for
the third quarter of 2015 were $1.9 million compared with $1.3
million for the third quarter of 2014.
- The operating loss for the third
quarter of 2015 was $3.9 million, including $211,000 of non-cash
stock-based compensation expense, compared with an operating loss
of $3.4 million, including $264,000 of non-cash stock-based
compensation, for the third quarter of 2014.
- The net loss for the third quarter of
2015 was $3.9 million, or $0.27 per ordinary share on 14.8 million
shares outstanding, compared with a net loss for the third quarter
of 2014 of $3.4 million, or $0.29 per ordinary share on 11.6
million shares outstanding.
Financial results for the nine months ended September 30,
2015 include:
- For the nine months ended September 30,
2015, recorded revenues from continuing operations were $4.7
million, an increase of 469% compared with $827,000 for the same
period of 2014.
- Pro forma consolidated revenues for the
first nine months of 2015, assuming a full nine months of
PersonalizeDx operations, were $6.6 million.
- Revenue from solid tumor testing
services in the first nine months of 2015 increased 196% to $2.5
million. Within solid tumor testing services, the Company’s Cancer
Origin Test posted revenue of $1.0 million during the first nine
months of 2015, an increase of 25% compared with $827,000 in the
same period of 2014.
- Revenue from urologic cancer testing
services in the first nine months of 2015 were $2.3 million. On a
pro forma basis, urologic cancer testing services in the first nine
months of 2015 were $3.7 million. As noted previously, prior to the
PersonalizeDx acquisition in April 2015, Rosetta Genomics did not
have revenue from urologic cancer testing services so there is no
comparison with the prior-year period. Pro forma gross billings for
the first nine months of 2015, assuming a full nine months of
PersonalizeDx operations, were $19.3 million, which included gross
billings for the PersonalizeDx business of $17.2 million. For the
same period in 2014, Rosetta Genomics’ gross billings were $2.0
million.
- Cost of revenues for the first nine
months of 2015 increased to $4.4 million from $1.1 million 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 nine months of 2015 increased to $1.9 million from $1.5
million for the first nine months 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 nine months of 2015 increased to $5.8
million from $4.9 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 nine months of 2015 were $5.5 million compared with $3.9
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 nine months
ended September 30, 2015 was $10.6 million, including $755,000 of
non-cash stock-based compensation expense as well as a $2.4 million
gain from a bargain purchase related to the acquisition of
PersonalizeDx. This compares with an operating loss for the first
nine months of 2014 of $10.7 million, including $735,000 of
non-cash stock-based compensation expense.
- The net loss for the first nine months
of 2015 was $10.6 million, or $0.76 per ordinary share on 14.0
million shares outstanding, compared with a net loss for the same
period in 2014 of $10.5 million, or $0.95 per ordinary share on
11.1 million shares outstanding.
Balance Sheet Highlights
As of September 30, 2015, Rosetta Genomics had $10.3 million in
cash and cash equivalents, restricted cash and short- and long-term
bank deposits, compared with $14.5 million as of June 30, 2015. The
Company used approximately $4.2 million in cash to fund operations
during the third quarter 2015. 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 fundraise and based on the Company’s current operations and
plans, Rosetta expects its current cash position will fund
operations into the first quarter of 2017.
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 news release, Rosetta provides non-GAAP gross billings 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 RosettaGX Cancer Testing Services
RosettaGX Cancer Tests are a series of microRNA-based and other
molecular diagnostic testing services offered by Rosetta Genomics.
RosettaGX Cancer Origin™ can accurately identify the primary tumor
type in primary and metastatic cancer including cancer of unknown
or uncertain primary (CUP). The mi-LUNG™ assay accurately
identifies the four main subtypes of lung cancer using small
amounts of tumor cells. The mi-KIDNEY™ assay accurately classifies
the four most common kidney tumors: clear cell renal cell carcinoma
(RCC), papillary RCC, chromophobe RCC and oncocytoma. RosettaGX
Reveal™, is a first-of-its-kind microRNA-based assay for the
classification of indeterminate thyroid nodules. Rosetta’s assays
are designed to provide objective diagnostic data. In the U.S.
alone, Rosetta Genomics estimates that 150,000 patients a year may
benefit from the RosettaGX Cancer Origin test, 62,000 patients a
year from the mi-KIDNEY assay, 222,000 patients a year from the
mi-LUNG assay and 150,000 patients a year from RosettaGX Reveal™
for indeterminate thyroid FNAs. The Company’s assays are offered
directly by Rosetta Genomics in the U.S., and through distributors
around the world. With the acquisition of PersonalizeDx in April
2015, 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.rosettagx.com. Parties
interested in ordering any of these tests can contact Rosetta
Genomics at (215) 382-9000.
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.rosettagx.com.
Forward-Looking Statement Disclaimer
Various statements in this release concerning Rosetta’s future
expectations, plans and prospects, including but not limited
to statements that we expect RosettaGX Reveal to gain
significant traction into a market valued at $350 million annually
in the U.S., that the biomarker for which we were granted a patent
allowance could be used as both a prognostic tool and as a
therapeutic target for prostate cancer, that the recent CLFS and
other favorable fee schedules are encouraging and should continue
to enhance both the amount and timing of payments for our testing
services in 2016 and that our current cash position will fund
operations into the first quarter of 2017constitute 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.
CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in
thousands (except share and per share data)
Nine months ended
September 30,
Three months ended
September 30,
2015 2014 2015 2014
Unaudited Unaudited Revenues $ 4,709 $ 827 $
2,431 $ 273 Cost of revenues: 4,437 1,147
2,168 377 Gross profit (loss)
272 (320 ) 263 (104 ) Operating
expenses: Research and development, net 1,947 1,493 586 482
Marketing and business development 5,753 4,949 1,678 1,556 General
and administrative 5,525 3,903 1,882 1,283 Gain from bargain
purchase related to acquisition of CynoGen, Inc. (2,352 )
- - - Total operating
expenses 10,873 10,345 4,146
3,321 Operating loss 10,601 10,665 3,883 3,425
Financial loss (income), net 6 (133 ) 47 (69 ) Tax expenses
15 12 5 4 Net loss
$ 10
,622 $ 10,544 $ 3,935 $ 3,360
Basic and diluted net loss per ordinary
share attributable to Rosetta Genomics' shareholders
$ 0.76 $ 0.95 $ 0.27 $ 0.29 Weighted
average number of ordinary shares used to compute basic and diluted
net loss per ordinary share 13,991,549
11,065,597 14,765,423 11,574,874
CONDENSED INTERIM CONSOLIDATED BALANCE
SHEETS
U.S. dollars in thousands
September 30, December
31, 2015 2014 Unaudited ASSETS
CURRENT ASSETS: Cash and cash equivalents $ 6,387 $ 7,929
Restricted cash 52 52 Short-term bank deposits 3,247 7
,650
Trade receivables 5,922 338 Other accounts receivable and prepaid
expenses 521 483
Total current
assets
16,129 16
,452 LONG TERM ASSETS:
Property and equipment, net 3,056 822 Restricted bank deposit and
other long-term receivables 625 4
Total long
term assets
3,681 826
Total
assets
$ 19,810 $ 17,278
CONDENSED INTERIM CONSOLIDATED BALANCE
SHEETS
U.S. dollars in thousands (except share
data)
September 30, December 31,
2015 2014 Unaudited LIABILITIES AND
SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Trade payables $
846 $ 563 Other accounts payables and accruals 1,787 1,648
Total current
liabilities
2,633 2
,211 LONG-TERM LIABILITIES: Warrants related
to share purchase agreements 2 2
Total
long-term liabilities
2 2 COMMITMENTS AND CONTINGENT LIABILITIES
SHAREHOLDERS EQUITY: Share capital: Ordinary Shares of NIS 0.6 par
value: 40,000,000 shares authorized at September 30, 2015 and
December 31, 2014; 14,847,286 and 11,765,678 shares issued at
September 30, 2015 and December 31, 2014, respectively; 14,844,028
(unaudited) and 11,762,420 shares outstanding at September 30, 2015
and December 31, 2014, respectively 2,309 1,830 Additional paid-in
capital 148,413 136
,160 Accumulated deficit (133,547)
(122
,925)
Total
shareholders' equity
17,175 15
,065
Total
liabilities and shareholders' equity
$ 19,810 $ 17,278
Nine months
ended Three months ended September 30,
September 30, 2015 2014 2015
2014 GAAP revenues (Pro forma revenues for nine
months ended 9/30/2015) $ 6,612 $ 827 $ 2,431 $ 273 Unrecognized
billings 12,714 1,132 5,068 371 Gross billings $ 19,326 $ 1,959 $
7,499 $ 644
Nine months ended September 30,
2015 GAAP revenues $ 4,709 Additional revenues from
PersonalizeDx for non-consolidated period of January 1, 2015 -
April 12, 2015 1,903 Pro forma revenues $ 6,612
Three
months ended June 30, 2015 GAAP revenues $ 1,916
Additional revenues from PersonalizeDx for non-consolidated period
of April 1, 2015 - April 12, 2015 169 Pro forma revenues $ 2,085
Three months ended June 30, 2015 GAAP
revenues for solid tumor testing services $ 945 Additional revenues
from PersonalizeDx for non-consolidated period of April 1, 2015 -
April 12, 2015 38 Pro forma revenues for solid tumor testing
services $ 983
Three months ended June 30,
2015 GAAP revenues for urologic cancer testing services $
971 Additional revenues from PersonalizeDx for non-consolidated
period of April 1, 2015 - April 12, 2015 131 Pro forma revenues for
urologic cancer testing services $ 1,102
Nine months
ended September 30, 2015 GAAP revenues for
urologic cancer testing services $ 2,258 Additional revenues from
PersonalizeDx for non-consolidated period of April 1, 2015 - April
12, 2015 1,433 Pro forma revenues for urologic cancer testing
services $ 3,691
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151201005800/en/
Company:Rosetta GenomicsKen Berlin, 609-419-9003President
& CEOinvestors@rosettagenomics.comorInvestors:LHAAnne
Marie Fields, 212-838-3777afields@lhai.comorBruce Voss,
310-691-7100bvoss@lhai.com
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