Cancer Genetics, Inc. (Nasdaq: CGIX) (“Cancer Genetics” or the
“Company”), a leader in drug discovery and preclinical oncology and
immuno-oncology services, today published a letter to shareholders
from its Chief Executive Officer, Jay Roberts.
Dear Fellow Shareholders,
As we enter into 2020, I want to review a few
compelling company developments and accomplishments that have
occurred since we filed our 10-Q for 3Q 2019. We have made
significant strides toward cleaning up our balance sheet and
positioning the company for the future. I would like to now
highlight the multiple corporate initiatives that we are taking to
strengthen our financial position, build on our growing discovery
services business and further advance ourselves as a leader in the
field of precision and translational medicine. As we start the 2020
year, we are pleased to share with you a few of our accomplishments
from 2019 and several new initiatives that are shaping Cancer
Genetics to become a stronger company in the year ahead.
Cancer Genetics and
vivoPharm
We are focused on driving forward with a
sustainable business model in precision and translational medicine
from both our organic business and the initiatives we have
undergone to secure strategic alternatives. With this mission in
mind, we have consolidated our business and are emerging with a
focus on operational efficiencies and driving growth in the global
regions we serve in the U.S., Europe and Australia. From our
existing sites, we are anticipating revenue growth from our core
Drug Discovery business; and plan to announce more information
about our strategic direction in the coming months. Recent
accomplishments in 2019 included:
- Completed the divestiture of two operating units (Biopharma and
Clinical Services) for cash and future cash payment streams
- Received a combined amount of approximately $21 million in cash
during 2H-2019 as the result of the aforementioned divestiture
transactions
- Settled approximately $20 million of debt and related interest
and fees in 2019
- Exited 2019 with approximately $4 million in cash on our
balance sheet
Our vivoPharm business unit had a solid year of
revenue growth year-over-year, and experienced numerous new
discovery programs coming from Europe and our existing customer
base in the United States. vivoPharm provides proprietary
preclinical oncology and immuno-oncology services to the
biotechnology and pharmaceutical industries. We are leading in
orthotopic and metastases tumor models and offer whole body
imaging, including toxicology testing and bioanalytical analysis to
Good Laboratory Practice (GLP). We specialize in conducting studies
tailored to guide drug development, starting from compound
libraries and ending with a comprehensive set of in
vitro and in vivo data and reports, as needed for
Investigational New Drug (IND) filing. vivoPharm operates in The
Association for Assessment and Accreditation of Laboratory Animal
Care International (AAALAC) accredited and GLP compliant audited
facilities.
We plan to file our 2019 Form 10-K in March
2019, which will reflect our financial results for the year and
will indicate our focus on delivering cost efficient initiatives
and our consolidated operational focus on drug discovery and
preclinical services in oncology and immuno-oncology. Learn more
about our Discovery Services at https://vivopharm.com.au/.
Open to Exploring New
Opportunities
As we have previously announced in our 3Q 2019
update, Cancer Genetics has retained the M&A team from HC
Wainwright & Co. to assist us in exploring strategic
alternatives including: identifying a future merger or acquisition
candidate, selling other corporate assets, and initiating other
strategic transactions. Recently we held a series of meetings in
San Francisco during the JPMorgan Healthcare Conference (January
13-16, 2020). The event gave us an opportunity to meet with
potential institutional investors and strategic parties. We will be
posting future investor and business-related activities regularly
on the Cancer Genetics website at www.cancergenetics.com.
Our current cash position coming into 2020 of
approximately $4 million and our Discovery Services business
(vivoPharm) operating in a cash efficient way enables the Company
to explore strategic opportunities that will strengthen the core
business and increase value to our shareholders.
As Cancer Genetics re-engineers its business, we
believe it is important to communicate the transition outwardly to
our stakeholders including our shareholders, biotechnology and
pharmaceutical company customers, business prospects, investors,
and other business partners. We have commenced various initiatives
to further define our mission including: new brand identity,
updating our corporate logo and web site design, and enhancing our
communications approach. You can expect to see additional changes
taking place over the coming months and further into 2020.
Concluding Remarks & Looking
Forward
In summary, we would like to thank you for your
investment in Cancer Genetics and express our appreciation for your
ongoing support. We look forward to staying in touch with you. As
always, please feel free to reach out if you have additional
questions or comments.
Sincerely, Mr. John A. Roberts, MBAPresident and
Chief Executive Officer
About Cancer Genetics, Inc.
Through the acquisition of vivoPharm, the
Company offers proprietary preclinical test systems supporting
clinical diagnostic offerings at early stages, valued by the
pharmaceutical industry, biotechnology companies and academic
research centers. vivoPharm specializes in conducting studies
tailored to guide drug development, starting from compound
libraries and ending with a comprehensive set of in vitro and in
vivo data and reports, as needed for Investigational New Drug
filings. The Company recorded revenue from its Discovery Services
business from continuing operations of $4.9 million for the full
year 2018 and $5.4 million in the nine month period ended September
30, 2019.
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 Cancer Genetics,
Inc.’s expectations regarding future financial and/or operating
results, potential for our tests and services and future revenues
or growth in this press release 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 with respect to
our ability to collect on future income or payment streams and
settle with our creditors, risks with respect to our ability to
successfully operate the Discovery Services business, risks with
respect to our ability to obtain future capital to satisfy our
obligations to our lenders and creditors, regulatory risks, risks
of cancellation of customer contracts or discontinuance of trials,
uncertainties with respect to evaluating strategic options,
maintenance of intellectual property rights, risks with respect to
maintaining our listing on Nasdaq, and other risks discussed in the
Cancer Genetics, Inc. Form 10-K for the year ended December 31,
2018 and Form 10-Q for the quarter ended September 30, 2019, 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.
Investor Contacts:John A. Roberts Email:
jay.roberts@cgix.com
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