Revenues increase 228%; Gross billings more
than double
Business Update Conference Call to be held on
March 17th at 10:00 a.m. Eastern time
Rosetta Genomics Ltd. (NASDAQ:ROSG), a leading developer and
provider of microRNA-based molecular diagnostics, today reported
financial results for the 12 months ended December 31, 2014.
Highlights for the second half of 2014 and recent weeks
include:
- Showcased the Company’s microRNA-based
assay for thyroid cancer at the 84th Annual Meeting of the American
Thyroid Association (ATA), on track to launch in the third quarter
of 2015;
- Published data in the peer-reviewed
journal Applied Immunohistochemistry and Molecular Morphology,
which highlight the ability of microRNA profiles to differentiate
adrenocortical carcinomas from adenomas, as well as their ability
to identify malignancy in adrenocortical tumors (ACTs);
- Conducted the first clinical study to
identify novel microRNA candidates for the treatment of Duchenne
Muscular Dystrophy (DMD) under a strategic alliance with Marina
Biotech;
- Published a study in the Journal of
Kidney Cancer that supports the use of the Rosetta Kidney Cancer
Test™ to accurately classify tumor subtypes in kidney cancers and
be a potential driver of the reduction of unnecessary
surgeries;
- Executed the following four
collaboration agreements:
- Collaboration with Biocept, Inc. that
will utilize Biocept’s patented microfluidic channel technology to
capture circulating tumor cells (CTCs) and then apply Rosetta
Genomics’ technical expertise and proprietary methods to extract
and analyze microRNA from these cells;
- Strategic alliance with the Institute
of Molecular Translational Medicine (IMTM) to improve the diagnosis
of malignant tumors in suspected thyroid cancers by utilizing the
clinical samples available at IMTM and Rosetta’s microRNA platform
technology;
- Partnership with Admera Health to
market and sell their PGxOne and EGFR & KRAS clinical
sequencing tests to oncologists and pathologists, which is expected
to generate additional revenue through 2015 and beyond; and
- Partnership with Precipio Diagnostics
for the sales and marketing of Precipio’s oncology tests, which
include bone marrow and peripheral blood testing for hematological
malignancies, such as leukemias and lymphomas.
- Fortified the Company’s intellectual
property with the issuance of three important patents in Japan, the
U.S. and Europe:
- Japanese patent protects the sequence
of miR-92b, its complement, as well as its use as a probe in
Rosetta’s Cancer Origin Test™;
- U.S. patent covers the use of miR-34a
for the treatment of p53-associated cancers; and
- European patent claims the specific
composition for miR-451, a miR relating to Rosetta’s Cancer of
Unknown Primary testing franchise.
Management Commentary
"Throughout the second half of 2014, we continued to make
significant progress on our strategic plan to advance Rosetta
Genomics in three key areas: broadening our differentiated and
proprietary content for use in personalized medicine, accelerating
our revenue growth to achieve scale and improving our efficiency in
delivering and distributing novel content. Our ongoing focus on
these areas will support our goals to grow current product revenue,
expand our product offerings and optimize our commercial and
laboratory infrastructure as we move toward profitability,” said
Kenneth A. Berlin, President and Chief Executive Officer of Rosetta
Genomics.
“We are very pleased with our 2014 revenue, which increased more
than 200% compared with 2013. While off a modest base, this growth
highlights the traction our commercial team is gaining and
demonstrates that we are making good progress enhancing awareness
and increasing demand for our testing services as well as
monetizing our leading microRNA biomarker platform through our
various collaborations.
“Since the beginning of 2014 we have entered into eight
collaborations that include sales and marketing partnerships,
research and development alliances and master service agreements.
We expect these relationships will be significant contributors to
both our revenue base and our product pipeline over time. Our
revenues already reflect the positive impact of certain of these
arrangements and we expect to see continued revenue growth from
these third-party collaborations in 2015. Importantly, these
arrangements allow us to leverage our leading microRNA biomarker
platform and commercial organization, and have the potential to
drive long-term value.
“Throughout 2014 we made considerable progress with our clinical
development programs, most notably with our thyroid neoplasia
assay, which remains on track to complete final validation studies
and launch in the U.S. in the third quarter of 2015. We look
forward to publishing data on this new assay to underscore its
significant advantages compared with currently marketed products,
which generated approximately $45 million in revenues in 2014. We
believe this will be an important product for our portfolio because
these earlier competitors have established the market, and because
up to 30% of FNAs yield indeterminate results. The resulting
opportunity exceeds $350 million in the U.S. alone.
“We continue to build and strengthen our patent portfolio, which
allows us to protect, advance and monetize our leadership position
in microRNA technology in diagnostics and therapeutics,” concluded
Mr. Berlin.
Financial results for the year ended December 31, 2014
include:
- Revenues from continuing operations for
2014 were $1.3 million, up 228% from 2013 revenues of
$405,000.
- Total gross billings for 2014 were $2.8
million, more than double gross billings of $1.1 million in
2013.
- Cost of revenues for 2014 increased to
$1.3 million from $709,000 for 2013, primarily due to higher volume
of processed samples.
- Research and development expenses for
2014 increased to $1.9 million from $1.7 million for 2013,
primarily due to increases in headcount and lab materials to create
and advance the Company’s expanded pipeline of R&D
projects.
- Marketing and business development
expenses for 2014 decreased to $6.8 million from $7.0 million in
the prior year, as the Company maintained its ongoing investment in
U.S. commercialization efforts as well as business development
initiatives to procure collaborative and/or licensing
agreements.
- General and administrative expenses for
2014 were $5.5 million, compared with $4.3 million for 2013, with
the increase primarily due to higher overhead as the Company added
key management and other personnel.
- The operating loss for 2014 was $14.3
million, including $943,000 of non-cash stock-based compensation
expense. This compares with an operating loss for 2013 of $13.3
million, including $893,000 of non-cash stock-based compensation
expense.
- The net loss after discontinued
operations for 2014 was $14.5 million, or $1.29 per ordinary share
on 11.2 million shares outstanding, compared with a net loss after
discontinued operations for 2013 of $12.9 million, or $1.34 per
ordinary share on 9.6 million shares outstanding.
- On a non-GAAP basis, excluding
stock-based compensation expense, the net loss for 2014 was $13.6
million, or $1.21 per ordinary share, compared with a net loss for
2013 of $12.0 million, or $1.25 per ordinary share. Details
reconciling non-GAAP amounts with GAAP amounts are provided
below.
Balance Sheet Highlights
As of December 31, 2014, Rosetta Genomics had $15.6 million in
cash and cash equivalents, restricted cash and short-term bank
deposits, compared with $24.5 million as of December 31, 2013. The
Company used approximately $13.6 million in cash to fund operations
during 2014. During 2014, the Company raised net proceeds of $5.0
million from the sale of approximately 1.2 million ordinary shares
through a Sales Agreement with Cantor Fitzgerald & Co., which
was terminated in October 2014.
During the first quarter of 2015 to date, the Company has raised
net proceeds of $9.3 million from the sale of approximately 2.2
million ordinary shares through a new Sales Agreement entered into
with Cantor Fitzgerald & Co. in February 2015. Given this
recent raise and based on the Company’s current operations, Rosetta
expects its current cash position will take it into 2017.
Conference Call
Rosetta Genomics management will host a conference call on March
17, 2015 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 4557508.
A telephone replay will be available through March 24, 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 4557508.
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 event.
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 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 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. Rosetta’s assays are designed to provide objective
diagnostic data; it is the treating physician’s responsibility to
diagnose and administer the appropriate treatment. In the U.S.
alone, Rosetta Genomics estimates that 200,000 patients a year may
benefit from the Rosetta Cancer Origin Test™, 65,000 from the
Rosetta Kidney Cancer Test™ and 226,000 patients from the Rosetta
Lung Cancer Test™. 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 PGxOne™ test and the EGFR and KRAS sequencing
services for Admera Health, as well as Precipio’s oncology tests,
which include bone marrow and peripheral blood testing for
hematological malignancies, such as leukemias and lymphomas. For
more information, please visit www.rosettagenomics.com. Parties
interested in ordering the test can contact Rosetta Genomics at
(215) 382-9000 ext. 309.
About Rosetta Genomics
Rosetta develops and commercializes a full range of
microRNA-based molecular diagnostics. Founded in 2000, 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. Rosetta’s cancer testing
services are commercially available through its Philadelphia-based
CAP-accredited, CLIA-certified lab.
Forward-Looking Statement Disclaimer
Various statements in this release concerning Rosetta’s future
expectations, plans and prospects, including without limitation,
that the partnership with Admera Health is expected to generate
additional revenue through 2015 and beyond, that the ongoing focus
on content, scale and efficiencies in delivery and distribution
will support Rosetta’s goals to grow current product revenue,
expand product offerings and optimize commercial and laboratory
infrastructure as the Company moves toward profitability, that
third-party collaborations will be significant contributors to
Rosetta’s revenue base and product pipeline over time, and that
Rosetta’s thyroid neoplasia assay will complete final validation
studies and launch in the U.S. in the third quarter of 2015 and the
potential market for this assay, 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.
CONSOLIDATED BALANCE SHEETSU.S.
dollars in thousands
December 31, 2014
2013 ASSETS CURRENT ASSETS: Cash and
cash equivalents $ 7,929 $ 16,774 Restricted cash 52 24 Short-term
bank deposits 7,650 7,667 Trade receivables 338 224 Other accounts
receivable and prepaid expenses 483 309
Total current
assets
16,452 24,998 LONG TERM ASSETS:
Long-term receivable 4 8 Property and equipment, net 822
874
Total long
term assets
826 882
Total
assets
$ 17,278 $ 25,880
LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIES: Trade
payables $ 563 $ 906
Other accounts payables and
accruals 1,648 1,032
Total
current liabilities
2,211 1,938
LONG-TERM
LIABILITIES: Warrants related to share purchase
agreements 2 81
Deferred revenue -
228
Total
long-term liabilities
2 309
Total
shareholders' equity
15,065 23,633
Total
liabilities and shareholders' equity
$ 17,278 $ 25,880
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE LOSS
U.S. dollars in thousands (except share
and per share data)
2014 2013
Revenues $ 1,327 $ 405 Cost of revenues 1,310
709 Gross (profit) loss (17 )
304 Operating expenses: Research and
development, net 1,927 1,744 Marketing and business development
6,848 7,002 General and administrative 5,494
4,297
Total
operating expenses
14,269 13,043 Operating loss
14,252 13,347 Financial expense (income), net 259
(177 ) Loss before taxes 14,511 13,170 Taxes
expense 15 - Loss from
continuing operations 14,526 13,170
Net comprehensive (income) from discontinued operations
- (273 ) Net comprehensive loss after
discontinued operations $ 14,526 $ 12,897
Basic and diluted net loss per Ordinary Share from continuing
operations $ 1.29 $ 1.37 Basic and diluted net
(income) per Ordinary Share from discontinued operations $ -
$ (0.03 ) Basic and diluted net loss per Ordinary Share $
1.29 $ 1.34 Weighted average number of
Ordinary Shares used to compute basic and diluted net loss per
Ordinary Share 11,239,892 9,593,952
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED
STATEMENT OF OPERATIONS: U.S. Dollar in Thousands (except
share and per share data)
December 31,
USD in
thousands
2014 2013 Net comprehensive loss after
discontinued operations $ 14,526 $ 12,897 Stock-based compensation
943 893
non-GAAP net loss
$ 13,583 $ 12,004
December 31,
Basic and diluted
per share data
2014 2013 Net loss after discontinued
operations $ 1.29 $ 1.34 Stock-based compensation 0.08
0.09
non-GAAP net loss $
1.21 $ 1.25 Weighted
average number of Ordinary shares used to compute basic and diluted
net loss per Ordinary share 11,239,892 9,593,952
December 31, 2014 2013 Revenues
$ 1,326,740 $ 404,927 Unrecognized billings 1,452,967 686,361 Gross
billings $ 2,779,707 $ 1,091,288
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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