Cancer Genetics, Inc. Announces 39% Revenue Increase and Provides Recent Company Highlights
May 10 2016 - 4:01PM
Cancer Genetics, Inc. (Nasdaq:CGIX), an emerging leader in
DNA-based cancer diagnostics, announced today financial and
operating results for the first quarter ended March 31, 2016.
Financial results and highlights for the quarter
ended March 31, 2016 include:
Financial
Highlights:
- Total revenues were $6.1 million, $3.3 million from Biopharma
Services, $2.5 million from Clinical services and $0.3 million from
Discovery Services – a total increase of 39% over Q1 2015 revenues
of $4.4 million, and 11% sequentially over Q4 2015.
- Total Clinical Services test volumes were 6,608 for the quarter
which represented the first full quarter of operations after the
acquisition of Response Genetics.
- Signed contracts for expected future Biopharma Services revenue
in connection with clinical trials increased significantly to over
$41 million, an increase of 37% or $11 million over Q1 2015, and a
sequential increase of over $4 million from Q4 2015.
- Gross profit margins improved to 32% or $2.0 million, an
improvement from 28% or $0.7 million over Q1 2015, and a 19%
sequential increase from 13% or $0.7 million during Q4
2015.
- Total expenses for the quarter were $11.3 million, a reduction
of 11% from $12.7 million during Q4 2015 largely driven by
reduction in employees in both COGS and SG&A as the Company
entered into a phased plan to rationalize workgroups and streamline
operations across sites.
- Total costs for SG&A improved during Q1 2016 by 17% over Q4
2015 – from $6.8 million to $5.6 million while COGS during Q1 2016
were $4.1 million, an improvement of 14% from $4.8 million during
Q4 2015 largely driven by headcount reduction at the CGI Los
Angeles facility.
“Our company has focused aggressively on two
critical items, 1) the final phase of integration of Response
Genetics, and 2) on developing new business contracts – both
clinical and biopharma – with partners that will be essential to
helping both long-term growth and margin expansion,” said Panna
Sharma, CEO & President of Cancer Genetics, Inc. “Our company’s
solid growth, coupled with our industry leading capabilities in
providing both genomic and immune marker data positions CGI in a
central position to the be partner of choice in delivering
precision medicine for oncology.”
Recent Corporate
Highlights:
- Developed an industry-leading, unique offering in
immuno-oncology testing, immune monitoring and immune profiling
using multiple technologies including genomics,
immunohistochemistry (IHC), transcriptomics, and immuno-phenotyping
that has been optimized for multiple cancer types in both blood
cancers and solid tumors.
- Closed contracts and agreements for 12 IO trials and
validations across both the CGI East and West facilities in
multiple tumor types including head and neck, ovarian, lung,
melanoma and lymphomas that are generating revenue and will
continue ramping up throughout 2016 and 2017.
- Finalized the licensing and commercialization agreement with
Oncospire Genomics and Mayo Clinic for the market introduction of a
next-generation based sequencing (NGS) panel for Multiple Myeloma
which has been launched for usage in clinical trials for biotech
and pharma companies and will be launched during Q2 for routine
clinical usage.
- Launched a joint development and NGS panel validation
initiative in Kidney Cancer with the Huntsman Cancer Center
Institute, Dr. Neeraj Agarwal, the Director of the Genitourinary
Program at University of Utah and Pfizer to validate CGI’s NGS
panel for the prediction of patient response to Sunitinib® in
Kidney Cancer and the development of a cell-free DNA assay to
assess treatment response and monitor disease
progression.
- Launched the FDA-approved PD-L1 companion and complementary
IHC-based diagnostic biomarker for both clinical usage and
biopharma trials.
- Expanded The ALCHEMIST lung cancer trial with the National
Cancer Institute and pharma sponsors to include PD-L1 as part of
the comprehensive profiling for all patients, which is being
managed and delivered from our Solid Tumor Center of Excellence at
CGI West.
- Launched an industry-leading, clinically actionable and focused
NGS panel for solid tumors that can offer molecular profiling for
lung, colorectal, breast, skin, and other solid tumors – CGI
FOCUS::Oncomine. This panel is being actively used in a global,
open-label, basket trial to identify specific genomic aberrations
across a diverse range of tumors.
- Initiated a large-scale clinical study with a global biopharma
company that leverages CGI’s proprietary CLL and Lymphoma NGS
panels to help subtype patients and aid in molecular
characterization of patients with B-cell cancers.
- Expanded overall footprint of reimbursement agreements with
payers and third-party insurers to now cover over 29 payers and 180
million lives across commercial, BlueCross BlueShield, Medicare
advantage and Medicaid plans.
“The future of precision medicine in oncology
will increasingly need the integration of leading edge knowledge
from multiple disciplines such as genomics, immunology and
transcriptomics to build a more comprehensive profile of patients,
populations and disease progression. CGI is very unique in our
ability to provide real solutions grounded in innovative research
that are substantially fragmented in the broader marketplace,” said
Panna Sharma. “The global infrastructure and unique business model
we’ve developed through strategic acquisitions has positioned us
for diversified growth and unparalleled access to the oncology
community. This has allowed us to develop a durable platform from
which to commercialize our oncology programs. Our team’s efforts in
Immuno-Oncology will drive substantial increases in both community
testing and clinical trial participation throughout the remainder
of 2016 and well into 2017 which leads the company towards its goal
of profitability.”
Revenue increased 39% to $6.1 million for the
three months ended March 31, 2016, from $4.4 million for the three
months ended March 31, 2015. Revenue from Biopharma Services,
representing 55% of our total revenue totaled $3.3 million in the
first quarter of 2016. Revenue from Clinical Services
customers, representing 40% of our total revenue, increased 181%,
or $1.6 million, to $2.5 million in the first quarter of 2016. This
increase is the result of the acquisition of Response
Genetics. Discovery Services contributed $262 thousand
of revenue during the quarter. Total cash at March 31, 2016 was
$13.3 million.
CGI will also be providing slides with an
overview of the results and discussion points; they will be
available at http://ir.cancergenetics.com/presentations.
Conference Call & Webcast Details The
Company will conduct a conference call today, Tuesday, May
10th at 5:00 p.m. Eastern Time to discuss its financial
performance for the 2016 first quarter and other business
activities, including matters related to future
performance. Details for the conference call and webcast are
noted below, and replays will be made available thru May 24,
2016.
Tuesday, May 10th @ 5:00pm Eastern
TimeDomestic:
877-397-0286
International:
719-325-4749 Conference
ID:
2482123 Webcast:
http://public.viavid.com/index.php?id=119530
Replays Available through May
24th Domestic:
877-870-5176
International:
858-384-5517 Replay
PIN:
2482123
About Cancer Genetics Cancer Genetics,
Inc. is a leader in enabling precision medicine in oncology from
bench to bedside through the use of oncology biomarkers and
molecular testing. CGI is developing a global footprint with
locations in the US, India and China. We have established strong
clinical research collaborations with major cancer centers such as
Memorial Sloan Kettering, The Cleveland Clinic, Mayo Clinic, Keck
School of Medicine at USC and the National Cancer Institute.
The Company offers a comprehensive range of laboratory services
that provide critical genomic and biomarker information. Its
state-of-the-art reference labs are CLIA-certified and
CAP-accredited in the US and have licensure from several states
including New York State.
For more information, please visit or follow us:
Internet: http://www.cancergenetics.com Twitter:
@Cancer_Genetics Facebook: www.facebook.com/CancerGenetics
Forward Looking Statements This press
release may contain 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, risks of
cancellation of customer contracts or discontinuance of trials,
risks that anticipated benefits from acquisitions will not be
realized, 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 Cancer Genetics, Inc. Form 10-K for the year ended
December 31, 2015 along with other filings with the Securities and
Exchange Commission. These forward-looking statements speak only as
of the date hereof. Cancer Genetics, Inc. disclaims any obligation
to update these forward-looking statements.
|
Cancer Genetics, Inc. and
Subsidiaries |
Consolidated Statements of Operations
(Unaudited) |
(in thousands, except per share
amounts) |
|
|
Three Months Ended March 31, |
|
2016 |
|
2015 |
Revenue |
$ |
6,068 |
|
|
$ |
4,370 |
|
Cost of
revenues |
4,103 |
|
|
3,141 |
|
Gross profit |
1,965 |
|
|
1,229 |
|
Operating expenses: |
|
|
|
Research and development |
1,532 |
|
|
1,278 |
|
General and administrative |
4,318 |
|
|
2,987 |
|
Sales and marketing |
1,298 |
|
|
1,116 |
|
Total operating
expenses |
7,148 |
|
|
5,381 |
|
Loss from
operations |
(5,183 |
) |
|
(4,152 |
) |
Other income
(expense): |
|
|
|
Interest expense |
(126 |
) |
|
(34 |
) |
Interest income |
4 |
|
|
13 |
|
Change in fair value of acquisition
note payable |
34 |
|
|
(90 |
) |
Change in fair value of warrant
liability |
17 |
|
|
(15 |
) |
Total other
(expense) |
(71 |
) |
|
(126 |
) |
Net (loss) |
$ |
(5,254 |
) |
|
$ |
(4,278 |
) |
Basic net (loss) per
share |
$ |
(0.39 |
) |
|
$ |
(0.44 |
) |
Diluted net (loss) per
share |
$ |
(0.39 |
) |
|
$ |
(0.44 |
) |
Basic Weighted-Average
Shares Outstanding |
13,547 |
|
|
9,704 |
|
Diluted Weighted-Average
Shares Outstanding |
13,547 |
|
|
9,704 |
|
Cancer Genetics, Inc. and
Subsidiaries |
Consolidated Balance Sheets
(Unaudited) |
(in thousands, except par value) |
|
|
March 31, 2016 |
|
December 31, 2015 |
ASSETS |
|
|
|
CURRENT ASSETS |
|
|
|
Cash and cash equivalents |
$ |
13,273 |
|
|
$ |
19,459 |
|
Accounts receivable, net of
allowance for doubtful accounts |
8,449 |
|
|
6,621 |
|
Other current assets |
1,823 |
|
|
2,118 |
|
Total current assets |
23,545 |
|
|
28,198 |
|
FIXED ASSETS, net of
accumulated depreciation |
5,870 |
|
|
6,069 |
|
OTHER ASSETS |
|
|
|
Restricted cash |
300 |
|
|
300 |
|
Patents and other intangible
assets, net of accumulated amortization |
1,679 |
|
|
1,727 |
|
Investment in joint venture |
329 |
|
|
341 |
|
Goodwill |
12,029 |
|
|
12,029 |
|
Other |
217 |
|
|
220 |
|
Total other assets |
14,554 |
|
|
14,617 |
|
Total Assets |
$ |
43,969 |
|
|
$ |
48,884 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
CURRENT LIABILITIES |
|
|
|
Accounts payable and accrued
expenses |
$ |
7,775 |
|
|
$ |
7,579 |
|
Obligations under capital leases,
current portion |
106 |
|
|
122 |
|
Deferred revenue |
630 |
|
|
831 |
|
Bank term note, current
portion |
1,833 |
|
|
1,333 |
|
Total current liabilities |
10,344 |
|
|
9,865 |
|
Obligations under capital
leases |
251 |
|
|
276 |
|
Deferred rent payable and
other |
309 |
|
|
315 |
|
Warrant liability |
— |
|
|
17 |
|
Deferred revenue,
long-term |
622 |
|
|
752 |
|
Bank term note |
4,146 |
|
|
4,642 |
|
Total liabilities |
15,672 |
|
|
15,867 |
|
STOCKHOLDERS’ EQUITY |
|
|
|
Preferred stock, authorized 9,764
shares, $0.0001 par value, none issued |
— |
|
|
— |
|
Common stock, authorized 100,000
shares, $0.0001 par value, 13,652 and 13,652 shares issued and
outstanding at March 31, 2016 and December 31, 2015,
respectively |
1 |
|
|
1 |
|
Additional paid-in capital |
131,701 |
|
|
131,167 |
|
Accumulated (deficit) |
(103,405 |
) |
|
(98,151 |
) |
Total Stockholders’
Equity |
28,297 |
|
|
33,017 |
|
Total Liabilities and
Stockholders’ Equity |
$ |
43,969 |
|
|
$ |
48,884 |
|
Cancer Genetics, Inc. and
Subsidiaries |
Consolidated Statements of Cash Flows
(Unaudited) |
(in thousands) |
|
|
Three Months Ended March 31, |
|
2016 |
|
2015 |
CASH FLOWS FROM OPERATING
ACTIVITIES |
|
|
|
Net (loss) |
$ |
(5,254 |
) |
|
$ |
(4,278 |
) |
Adjustments to reconcile net (loss)
to net cash (used in) operating activities: |
|
|
|
Depreciation |
518 |
|
|
348 |
|
Amortization |
87 |
|
|
9 |
|
Provision for bad debts |
— |
|
|
221 |
|
Stock-based compensation |
534 |
|
|
696 |
|
Change in fair value of acquisition
note payable |
(34 |
) |
|
90 |
|
Change in fair value of Gentris
contingent consideration |
— |
|
|
(162 |
) |
Change in fair value of warrant
liability |
(17 |
) |
|
15 |
|
Amortization of debt issuance
costs |
4 |
|
|
— |
|
Loss in equity method
investment |
12 |
|
|
207 |
|
Changes in: |
|
|
|
Accounts receivable |
(1,828 |
) |
|
(17 |
) |
Other current assets |
295 |
|
|
23 |
|
Other non-current assets |
3 |
|
|
— |
|
Accounts payable, accrued expenses
and deferred revenue |
(101 |
) |
|
(239 |
) |
Deferred rent and other |
(6 |
) |
|
(18 |
) |
Net cash (used in)
operating activities |
(5,787 |
) |
|
(3,105 |
) |
CASH FLOWS FROM INVESTING
ACTIVITIES |
|
|
|
Purchase of fixed assets |
(319 |
) |
|
(83 |
) |
Patent costs |
(39 |
) |
|
(40 |
) |
Net cash (used in)
investing activities |
(358 |
) |
|
(123 |
) |
CASH FLOWS FROM FINANCING
ACTIVITIES |
|
|
|
Principal payments on capital lease
obligations |
(41 |
) |
|
(14 |
) |
Net cash (used in)
financing activities |
(41 |
) |
|
(14 |
) |
Net (decrease) in cash and cash
equivalents |
(6,186 |
) |
|
(3,242 |
) |
CASH AND CASH
EQUIVALENTS |
|
|
|
Beginning |
19,459 |
|
|
25,554 |
|
Ending |
$ |
13,273 |
|
|
$ |
22,312 |
|
SUPPLEMENTAL CASH FLOW
DISCLOSURE |
|
|
|
|
|
|
|
Cash paid for interest |
$ |
97 |
|
|
$ |
34 |
|
Contact:
Panna Sharma
CEO & President
Cancer Genetics, Inc.
201-528-9200
panna.sharma@cgix.com
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