Cancer Genetics, Inc. Announces Fourth Quarter and Year-End 2013 Results, Provides Corporate Update
March 26 2014 - 4:01PM
- 72% Year-Over-Year Revenue Growth During Fourth Quarter
2013
- 54% Full Year 2013 Revenue Growth Achieving $6.6
Million For 2013
- Gross Margins Increased Threefold to 25.5% for Full
Year 2013 from 8.7% in 2012
- Increased Sales & Marketing Team During Fourth
Quarter To Have National Presence & Increased Focus on
Hospitals and Cancer Centers
- Conference Call Scheduled for Today, Wednesday, March
26, 2014, at 4:30 p.m. Eastern Time
Cancer Genetics, Inc. (Nasdaq:CGIX) ("CGI" or the "Company"), a
DNA-based diagnostics company focused on developing genomic-based
oncology tests and services, reported financial results for the
2013 fiscal year and for the fourth quarter ended December 31,
2013. Revenue for the fourth quarter was $1.9 million, an increase
of 72%, compared to 2012 fourth quarter revenue of $1.1 million.
Full year 2013 revenue was $6.6 million, an increase of 54%,
compared to full-year 2012 revenue of $4.3 million. During 2013,
10,771 tests were reported to physicians, pathologists, cancer
centers and biotech and pharma customers, up 63% from 6,610 tests
during 2012.
"We experienced strong revenue growth in 2013, driven in large
part by the ongoing adoption of CGI's unique tests and
comprehensive approach to disease-specific oncology testing. During
Q4 we scaled up our commercial teams in order to develop a wider
footprint of clinical sales professionals, and we expanded our
pipeline into areas of high unmet need, including renal and
cervical cancers," said Panna Sharma, CGI's president and chief
executive officer. "We look forward to accelerating growth during
2014 due to our improved sales and marketing infrastructure and our
robust, targeted portfolio of unique cancer tests for blood-borne
and urogenital cancers. We are also on track in advancing our own
next-generation sequencing programs and those in our joint-venture,
Oncospire Genomics™ with Mayo Clinic."
Operating expenses for the fourth quarter of 2013 were $3.2
million, inclusive of $0.8 million in stock based compensation
expense. This compares with operating expenses of $1.9 million
during the fourth quarter of 2012, inclusive of $0.1 million in
stock based compensation. The fourth quarter increase in operating
expenses was driven by increases in headcount, professional fees
and other costs of being public. Net loss was $2.5 million in the
fourth quarter, or $0.31 per basic share and $0.37 per diluted
share, compared with a net loss of $4.0 million in the fourth
quarter of 2012. The Q4-2013 net loss included $0.3 million in
interest expense. Interest expense is expected to decrease by over
85% starting in the second quarter of 2014 as a result of the
completion of the amortization of the loan guarantee and financing
fees.
For the full year, operating expenses were $10.1 million,
inclusive of $1.2 million in stock-based compensation expense,
compared to $8.0 million in 2012, inclusive of $0.9 million in
stock-based compensation expense. The increase in operating
expenses during 2013 includes one-time costs of $0.8 million
related to the IPO. Operating losses for the full year 2013 were
$8.5 million as compared to $7.6 million during 2012. Net loss for
the full year was $12.4 million, or $2.65 per basic share and $3.64
per diluted share. The loss includes $2.4 million in interest
expense.
At December 31, 2013, the company had $49.5 million of cash and
cash equivalents as a result of completing three public financings,
including a successful IPO and two follow-on offerings raising a
total of approximately $61.5 million net of offering costs.
Financial Highlights: Fourth-Quarter 2013
- Total revenue for the 4th quarter was $1.9 million, a 72%
increase from the $1.1 million reported in the 4th quarter of
2012.
- Test volume in the quarter was 2,736 compared with 1,673 in the
4th quarter of 2012, an increase of 64%.
- Gross margins were 26.5%, compared with 2.5% in the 4th quarter
of 2012.
- Total operating expenses were $3.2 million, compared to $1.9
million in the 4th quarter of 2012.
- Net loss for the quarter was $2.5 million, or $0.37 per share
(fully diluted), compared to a net loss of $4.0 million, or $3.86
per share (fully diluted) in the 4th quarter of 2012.
Financial Highlights: Fiscal Year 2013
- Total revenue for 2013 was $6.6 million an increase of 54% from
the $4.3 million reported in 2012, driven primarily by increases in
test volume.
- Test volume increased by 63% to 10,771 for the year ended
December 31, 2013, up from 6,610 for the same period in 2012.
- Average revenue (excluding grant revenue and probe revenue) per
test increased to $566 per test for 2013, up from $553 per test in
2012.
- Gross profit for the year was $1.7 million, compared with $0.4
million in the prior year. Gross margins were 25.5%, compared with
8.7% in 2012.
- Total operating expenses for 2013 were $10.1 million, compared
to $8.0 million for the same full-year period of 2012.
- Loss from operations for the 2013 fiscal year was $8.5 million,
compared to a loss from operations of $7.6 million for 2012.
- Net loss for 2013 was $12.4 million, compared to a net loss of
$6.7 million for 2012.
- Cash and cash equivalents were approximately $49.5 million as
of December 31, 2013, providing CGI with liquidity to fund future
research and development programs and company operations.
Recent Business Highlights
- In October 2013, CGI completed a public follow on share
offering, selling 3,286,700 shares of common stock at a public
offering price of $14.00 per share, resulting in gross proceeds of
$46.0 million ($42.3 million net proceeds).
- In November, following CLIA approval, CGI launched its
proprietary genomic-based diagnostic for cervical cancer, FHACT™ in
the U.S.
- In January, CGI signed an agreement with health insurer Three
Rivers Provider Network, Inc., to provide cancer diagnostic
services to more than 15 million domestic plan members.
- FHACT™, CGI's cervical cancer test was adopted by Kamineni
Hospital Group in India on International Women's Day culminating a
nine month validation to establish the validity and clinical value
of the test.
- The Mayo Clinic hosted an event to highlight progress at
Oncospire Genomics™, a joint venture with CGI to develop genetic
tests leveraging next generation sequencing (NGS). The JV is
initially pursuing the development of NGS panels for lung cancer,
multiple myeloma, and follicular lymphoma.
- New data on CGI's novel, patent protected kidney diagnostic
array, from a 6 month study that was conducted in collaboration
with Memorial Sloan Kettering, were presented at the Molecular
Pathology (AMP) Annual Conference in November.
- Genomic data and findings on CGI's novel diagnostic and
prognostic test for diffuse, large B-Cell lymphoma (DLBCL) were
presented at the American Society of Hematology (ASH) meeting in
December.
- In March, new data further validating CGI's UroGenRA™-Kidney
diagnostic test for renal cell cancer were presented at the annual
United States & Canadian Academy of Pathology (USCAP) in San
Diego, CA. These new data were generated as part of a collaborative
study conducted with the Cleveland Clinic and demonstrated 93%
diagnostic accuracy of the test.
- Christopher Mitton was appointed as Director of National
Account Development and Sales Operations in December.
- In January, biotechnology industry veteran John Pappajohn was
appointed to serve as the Chairman of the Board, a position
previously held by Dr. Raju S.K. Chaganti, effective
January 6, 2014.
- Dr. Paul Rothman, Dean of the Medical Faculty and CEO of Johns
Hopkins Medicine, was appointed to CGI's Board of Directors, also
in January.
- In March, Edward J. Sitar was appointed as Chief Financial
Officer, effective April 1 2014. Mr. Sitar previously served in
senior financial roles across multiple healthcare sectors and has
extensive expertise in navigating the highly technical insurance
and reimbursement landscape.
Conference Call and Webcast Details
As previously announced, CGI will hold a conference call on
Wednesday, March 26, 2014, to discuss its results for 2013.
Time: |
4:30 p.m. Eastern Time |
Dial in (domestic) |
(877) 407-4018 |
Dial in (international) |
(201) 689-8471 |
Conference ID: |
13579135 |
To participate in the call, please dial in approximately 10
minutes prior to the scheduled start time. Interested parties can
also listen via a live Internet webcast, which can be found via the
Company's website at http://ir.cancergenetics.com/events.
A replay of the call will be available for two weeks from March
26, 2014, until April 9, 2014. In addition, a recording of the call
will be available via the Company's website at
http://www.cancergenetics.com.
Replay (domestic) |
(877)-870-5176 |
Replay (international) |
(858) 384-5517 |
Conference ID: |
13579135 |
About Cancer Genetics:
Cancer Genetics, Inc. is an emerging leader in DNA-based cancer
diagnostics, servicing some of the most prestigious medical
institutions in the world. Our tests target cancers that are
difficult to diagnose and predict treatment outcomes. These cancers
include hematological, urogenital and HPV-associated cancers. We
also offer a comprehensive range of non-proprietary
oncology-focused tests and laboratory services that provide
critical genomic information to healthcare professionals, as well
as biopharma and biotech companies. Our state-of-the-art reference
lab is focused entirely on maintaining clinical excellence and is
both CLIA certified and CAP accredited and has licensure from
several states including New York State. We have established strong
research collaborations with major cancer centers such as Memorial
Sloan-Kettering, The Cleveland Clinic, Mayo Clinic and the National
Cancer Institute. For further information, please
see www.cancergenetics.com.
Forward-Looking Statements:
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements pertaining to future financial and/or
operating results, future growth in research, technology, clinical
development and potential opportunities for Cancer Genetics, Inc.
products and services, along with other statements about the future
expectations, beliefs, goals, plans, or prospects expressed by
management constitute forward-looking statements. Any statements
that are not historical fact (including, but not limited to,
statements that contain words such as "will," "believes," "plans,"
"anticipates," "expects," "estimates") should also be considered to
be forward-looking statements. Forward-looking statements involve
risks and uncertainties, including, without limitation, risks
inherent in the development and/or commercialization of potential
products, uncertainty in the results of clinical trials or
regulatory approvals, need and ability to obtain future capital,
maintenance of intellectual property rights and other risks
discussed in the Company's Form 10-Q for the quarter ended
September 30, 2013 and other filings with the Securities and
Exchange Commission. These forward-looking statements speak only as
of the date hereof. Cancer Genetics disclaims any obligation to
update these forward-looking statements.
CANCER GENETICS, INC.
AND SUBSIDIARY |
Condensed Consolidated
Balance Sheets |
|
|
|
|
December 31, |
|
2013 |
|
|
Unaudited |
2012 |
|
|
|
ASSETS |
|
|
CURRENT ASSETS |
|
|
Cash and cash equivalents |
$49,459,564 |
$819,906 |
Accounts receivable, net of
allowance for doubtful accounts of 2013 $36,000; 2012 $36,000 |
1,567,039 |
850,545 |
Other current assets |
864,616 |
489,278 |
Total current
assets |
51,891,219 |
2,159,729 |
FIXED ASSETS, net of accumulated
depreciation |
1,264,624 |
964,923 |
OTHER ASSETS |
|
|
Security deposits |
1,564 |
1,564 |
Restricted cash |
300,000 |
250,000 |
Loan guarantee and financing
fees, net of accumulated amortization of 2013 $517,500; 2012
$929,498 |
310,500 |
1,907,502 |
Patents |
401,709 |
324,764 |
Investment in joint
venture |
987,657 |
— |
Deferred offering costs |
— |
3,343,289 |
|
2,001,430 |
5,827,119 |
Total Assets |
$55,157,273 |
$8,951,771 |
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) |
|
|
CURRENT LIABILITIES |
|
|
Accounts payable and accrued
expenses |
$2,346,240 |
$4,578,761 |
Obligations under capital
leases, current portion |
51,400 |
17,158 |
Deferred revenue |
199,560 |
468,010 |
Notes payable, current
portion |
22,298 |
3,836,567 |
Line of credit |
— |
2,871,200 |
Total current
liabilities |
2,619,498 |
11,771,696 |
Obligations under capital leases |
309,777 |
7,490 |
Deferred rent payable |
170,789 |
164,298 |
Notes payable, long-term |
— |
2,440,683 |
Line of credit |
6,000,000 |
6,000,000 |
Warrant liability |
594,000 |
12,549,000 |
Total liabilities |
9,694,064 |
32,933,167 |
STOCKHOLDERS' EQUITY (DEFICIT) |
|
|
Convertible Preferred
Stock |
— |
241 |
Common stock, additional
paid-in capital, treasury stock and accumulated equity
(deficit) |
45,463,209 |
(23,981,637) |
Total Stockholders' Equity
(Deficit) |
45,463,209 |
(23,981,396) |
Total Liabilities and Stockholders'
Equity (Deficit) |
$55,157,273 |
$8,951,771 |
|
Cancer Genetics, Inc.
and Subsidiary |
Consolidated Statements
of Operations |
|
|
|
|
|
|
Three Months Ended December 31, |
Year Ended December 31, |
|
2013 |
2012 |
2013 |
2012 |
|
Unaudited |
Unaudited |
Unaudited |
|
Revenue |
$1,854,495 |
$1,075,732 |
$6,609,957 |
$4,301,563 |
Cost of revenues |
1,363,948 |
1,048,751 |
4,924,626 |
3,928,993 |
Gross
profit |
490,547 |
26,981 |
1,685,331 |
372,570 |
Operating expenses: |
|
|
|
|
Research and development |
806,082 |
560,275 |
2,190,204 |
2,111,947 |
Sales and marketing |
567,055 |
348,790 |
1,841,675 |
1,398,786 |
General and administrative |
1,855,860 |
1,027,123 |
6,115,035 |
4,502,424 |
Total operating
expenses |
3,228,997 |
1,936,188 |
10,146,914 |
8,013,157 |
Loss from
operations |
(2,738,450) |
(1,909,207) |
(8,461,583) |
(7,640,587) |
Other (expense) income: |
|
|
|
|
Interest expense |
(347,987) |
(1,441,018) |
(2,387,733) |
(4,701,028) |
Interest income |
25,048 |
— |
29,693 |
— |
Debt conversion costs |
— |
(1,862,012) |
(6,849,830) |
(1,862,012) |
Change in fair value of warrant
liability |
537,000 |
1,168,000 |
4,633,000 |
7,538,000 |
Total other (expense)
income |
214,061 |
(2,135,030) |
(4,574,870) |
974,960 |
Loss before income
taxes |
(2,524,389) |
(4,044,237) |
(13,036,453) |
(6,665,627) |
Income tax provision (benefit) |
— |
— |
(663,900) |
— |
Net loss |
$(2,524,389) |
$(4,044,237) |
$(12,372,553) |
$(6,665,627) |
Basic net loss per share |
$(0.31) |
$(3.00) |
$(2.65) |
$(4.97) |
Diluted net loss per share |
$(0.37) |
$(3.86) |
$(3.64) |
$(10.55) |
Basic Weighted Average Shares
Outstanding |
8,270,074 |
1,347,437 |
4,665,316 |
1,342,174 |
Diluted Weighted Average Shares
Outstanding |
8,298,014 |
1,349,999 |
4,675,974 |
1,346,161 |
CONTACT: Investor Relations
Michael Rice
Life Science Advisors LLC
646-597-6979
Media Relations
RedChip Companies, Inc.
Paul Kuntz, 800-733-2447, ext. 105
paul@redchip.com
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