Rosetta Genomics Reports 2013 Financial Results
Demand for microRNA Oncology Testing Services Continues to Grow
as Company Advances a Broad Pipeline of microRNA-Based Diagnostic
Assays and Therapeutic Products; Business Update Conference Call to
Be Held April 1st at 10:00 a.m. Eastern Time
PRINCETON, NJ and REHOVOT, ISRAEL--(Marketwired - Mar 31, 2014)
- Rosetta Genomics Ltd. (NASDAQ: ROSG), a leading developer and
provider of microRNA-based molecular diagnostics and therapeutics,
today reported financial results for the year ended December 31,
2013.
Highlights for the second half of 2013 and recent weeks
include:
- Continued to enhance awareness of and demand for the Rosetta
Cancer Origin Test™, which resulted in a 100% increase in revenues
compared with 2012;
- Recorded gross billings for 2013 of $1.1 million, which more
than doubled from $490,000 in 2012, with commercial initiatives
continuing to gain significant traction as evidenced by gross
billings of nearly $600,000 in the first quarter of 2014;
- Executed credentialing agreements for the Rosetta Cancer Origin
Test with four U.S. national healthcare network providers as well
as a managed care contract with a large Blue Cross/Blue Shield
affiliate, increasing coverage for this test to approximately 170
million Americans;
- Received three important U.S. patents that cover the Company's
microRNA-based technology as a diagnostic for pre-eclampsia, as a
treatment for liver cancer and as a therapeutic for non-small cell
lung cancer (NSCLC) in p53-negative patients;
- Announced a master service provider agreement with an
undisclosed major global biopharmaceutical company under which
Rosetta will provide its microRNA profiling and other services in
important areas of unmet medical need;
- Closed 2013 with cash and equivalents and short term bank
deposits of $24.5 million to support commercial expansion and
product development.
Management Commentary
"Throughout 2013 we made considerable progress in all three
areas critical to long-term revenue generation including current
product sales, new product development and third-party
collaborations. On the commercial front we made inroads
enhancing awareness and driving demand for the Rosetta Cancer
Origin Test and expanded coverage through Medicare and private
healthcare network providers," said Kenneth A. Berlin, President
and Chief Executive Officer of Rosetta Genomics.
"Investments in our commercial infrastructure are yielding
results as evidenced by the significant increase in product
revenues and billings in 2013. Moreover, we have seen
continued growth in product demand for the Rosetta Cancer Origin
Test, with first quarter 2014 billings of nearly $600,000
maintaining the momentum we saw in the fourth quarter of
2013. We look forward to further increases in billings and
product revenues as we continue to expand reimbursement coverage to
additional commercial carriers.
"The recently announced reinvigoration of our Research and
Development efforts is already producing results as we now expect
to launch at least one new diagnostic assay per year beginning in
2015. We have a number of promising product candidates under
development including our assay for indeterminate thyroid fine need
aspirate, which is scheduled to launch next year, as well as assays
for chronic kidney rejection, heart failure, Alzheimer's disease
and a therapeutic for cytomegalovirus (CMV) infection. We look
forward to reporting our progress with these initiatives over the
coming months.
"We were especially pleased to execute a master service
agreement with an undisclosed global biopharmaceutical company for
our microRNA profiling services, and expect to collaborate on the
utilization of a novel therapeutic approach in important areas of
unmet medical need. In addition, we continue to have
high-level discussions with a number of potential collaborators
that could allow us to leverage our leading microRNA biomarker
platform in both diagnostic and therapeutic applications. We
anticipate executing agreements with pharmaceutical and biotech
companies to assist their therapeutic efforts.
"In support of both our commercial and our development efforts,
we were pleased to publish several important articles in
peer-reviewed journals and to have clinically-validated data
presented at several key medical conferences. In tandem, we
remained focused on fortifying our leading patent position in
microRNA technology as this allows us to protect current products,
provides the backbone for new product development and offers
multiple opportunities for potential development partnerships as
well as transactions to monetize our intellectual property,"
concluded Mr. Berlin.
Financial Results for the Year Ended December 31, 2013
- For the year ended December 31, 2013, the Company recorded
revenues from continuing operations of $405,000, more than double
the $201,000 of revenues recorded for the year ended December 31,
2012.
- Cost of revenues increased to $709,000 for 2013, up from
$258,000 for 2012 primarily due to higher volume of processed
samples as well as increases in personnel and infrastructure to
meet current and anticipated sample volume.
- Research and development expenses for 2013 increased to $1.7
million from $1.2 million for 2012 primarily due to an increase in
headcount and lab materials to create and advance our expanded
pipeline of R&D projects.
- Marketing and business development expenses for 2013 increased
to $7.0 million from $4.0 million for 2012, primarily due to the
Company's ongoing investment in its U.S. commercialization efforts,
as well as to increases in business development initiatives to
procure collaborative and/or licensing agreements.
- General and administrative expenses in 2013 were $4.3 million
compared with $3.0 million in 2012, with the increase primarily due
to higher overhead as the Company added key executives and other
personnel.
- The operating loss for 2013 was $13.3 million, including
$847,000 of non-cash stock-compensation expense. This compares with
an operating loss for 2012 of $8.3 million, including $549,000 of
non-cash stock-compensation expense.
- The Company's net loss after discontinued operations for 2013
was $12.9 million or $1.34 per ordinary share on 9.6 million shares
outstanding, compared with a net loss after discontinued operations
for 2012 of $10.5 million or $2.35 per ordinary share on 4.4
million shares outstanding.
- On a non-GAAP basis, excluding stock-based compensation expense
and income/loss from revaluation of warrants, which are presented
as a liability on the balance sheet, as well as the embedded
conversion feature in the 2012 convertible debenture, the net loss
for 2013 was $12.1 million or $1.26 per ordinary share, compared
with a net loss for 2012 of $7.7 million or $1.74 per ordinary
share.
- Details reconciling non-GAAP amounts with GAAP amounts are
provided below.
Balance Sheet Highlights
As of December 31, 2013, Rosetta Genomics had $24.5 million in
cash and cash equivalents, restricted cash and short-term bank
deposits, compared with $31.0 million as of December 31, 2012. The
Company used approximately $12 million in cash to fund operations
in 2013. The 2013 cash position included net proceeds of $4.8
million from the sale of 1.3 million ordinary shares through the
previously announced Cantor Sales Agreement and $625,000 received
from a settlement with Sanra Laboratories in connection with the
previous sale of Parkway Clinical Laboratories by Rosetta Genomics
to Sanra.
Cash Guidance
The Company plans to continue to invest in the expansion of its
U.S. commercial operations and will fund further clinical
development of its microRNA technology. As a result, the Company
estimates that net cash requirements to fund operations in 2014
will be in the range of $14 million to $15 million. Rosetta
Genomics believes that its cash balance of $24.5 million as of
December 31, 2013, combined with projected revenue growth, will be
sufficient to fund operations until late 2015.
Conference Call
Rosetta Genomics management will host a conference call on April
1, 2014 at 10:00 a.m. Eastern time to discuss these financial
results and recent corporate developments, and to answer questions.
To access the live conference call, U.S. and Canadian participants
may dial (866) 239-5859;
international participants may dial (702) 495-1913. The
access code for the call is 19429704.
To access the audio replay, beginning two hours after the event
U.S. and Canadian participants may dial (855) 859-2056;
international participants may dial (404) 537-3406. The
access code for the replay is 19429704. The replay will be
available through April 8, 2014.
A live audio webcast of the call will also be available in the
"Investors" section of the Company's website at
www.rosettagenomics.com/investors. An archived webcast will be
available on the Company's website for 30 days beginning
approximately two hours after the event.
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). Rosetta
Mesothelioma Test™ diagnoses mesothelioma, a cancer connected to
asbestos exposure. 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™, 60,000 from the
Rosetta Mesothelioma 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.
For more information, please visit www.rosettagenomics.com. Parties
interested in ordering the test can contact Rosetta Genomics at
(215) 382-9000.
About Rosetta Genomics 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 and therapeutics. Rosetta currently commercializes
a full range of microRNA-based molecular
diagnostics. Rosetta's cancer testing services are
commercially available through its Philadelphia-based
CAP-accredited, CLIA-certified lab. Frost & Sullivan
recognized Rosetta Genomics with the 2012 North American Next
Generation Diagnostics Entrepreneurial Company of the Year
Award. For more information, please visit
www.rosettagenomics.com.
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 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 a table 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.
Forward-Looking Statement Disclaimer Various statements in this
release concerning Rosetta's future expectations, plans and
prospects, including without limitation, Rosetta's plans to launch
one new product per year beginning in 2015, that significant
increases in billings will translate to product revenue, that
discussions with potential collaborators could allow Rosetta to
leverage its leading microRNA biomarker platform in both diagnostic
and therapeutic applications and that Rosetta's cash balance of
$24.5 million as of December 31, 2013, combined with projected
revenue growth, will be sufficient to fund operations into 2015,
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, 2012 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.
-Tables to Follow-
|
|
|
|
|
|
|
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS |
|
U.S. dollars in thousands |
|
|
|
|
|
|
|
|
December 31, 2013 |
|
|
December 31, 2012 |
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
|
|
Cash
and cash equivalents |
|
$ |
16,774 |
|
|
$ |
30,798 |
|
Restricted cash |
|
|
24 |
|
|
|
34 |
|
Short-term bank deposits |
|
|
7,667 |
|
|
|
130 |
|
Trade
receivables |
|
|
224 |
|
|
|
88 |
|
Other
accounts receivable and prepaid expenses |
|
|
309 |
|
|
|
568 |
|
Discontinued operation, current assets |
|
|
- |
|
|
|
135 |
|
Total
current assets |
|
|
24,998 |
|
|
|
31,753 |
|
LONG-TERM ASSETS: |
|
|
|
|
|
|
|
|
Long-term receivables |
|
|
8 |
|
|
|
7 |
|
Property and equipment, net |
|
|
874 |
|
|
|
546 |
|
Discontinued operation, non-current assets |
|
|
- |
|
|
|
224 |
|
Total
long-term assets |
|
|
882 |
|
|
|
777 |
|
Total
assets |
|
$ |
25,880 |
|
|
$ |
32,530 |
|
LIABILITIES AND SHAREHOLDERS EQUITY |
|
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
Trade
payables |
|
$ |
906 |
|
|
$ |
754 |
|
Other
accounts payable and accruals |
|
|
1,032 |
|
|
|
512 |
|
Total
current liabilities |
|
|
1,938 |
|
|
|
1,266 |
|
LONG-TERM LIABILITIES: |
|
|
|
|
|
|
|
|
Warrants related to share purchase agreements |
|
|
81 |
|
|
|
136 |
|
Deferred revenue |
|
|
228 |
|
|
|
228 |
|
Total
long-term liabilities |
|
|
309 |
|
|
|
364 |
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY (DEFICIENCY): |
|
|
|
|
|
|
|
|
Ordinary Shares of NIS 0.6 par value: 40,000,000 and 20,000,000
shares authorized at December 31, 2013 and 2012, respectively;
10,473,488 and 9,099,805 shares issued at December 31, 2013 and
2012, respectively; 10,470,230 and 9,096,547 shares outstanding at
December 31, 2013 and 2012, respectively |
|
|
1,609 |
|
|
|
1,379 |
|
Additional paid-in capital |
|
|
130,423 |
|
|
|
125,023 |
|
Accumulated deficit |
|
|
(108,399 |
) |
|
|
(95,502 |
) |
Total
shareholders' equity |
|
|
23,633 |
|
|
|
30,900 |
|
Total
liabilities and shareholders' equity |
|
$ |
25,880 |
|
|
$ |
32,530 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF LOSS |
|
U.S. dollars in thousands (except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
For the year ended December 31, |
|
|
|
2013 |
|
|
2012 |
|
Revenues |
|
$ |
405 |
|
|
$ |
201 |
|
Cost
of revenues |
|
|
709 |
|
|
|
258 |
|
Gross
loss |
|
|
304 |
|
|
|
57 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development, net |
|
|
1,744 |
|
|
|
1,247 |
|
Marketing and business development |
|
|
7,002 |
|
|
|
3,938 |
|
General and administrative |
|
|
4,297 |
|
|
|
3,025 |
|
Total
operating expenses |
|
|
13,043 |
|
|
|
8,210 |
|
Operating loss |
|
|
13,347 |
|
|
|
8,267 |
|
Financial expense (income), net |
|
|
(177 |
) |
|
|
2,429 |
|
Loss
from continuing operations |
|
|
13,170 |
|
|
|
10,696 |
|
Other
comprehensive income attributed to marketable securities |
|
|
- |
|
|
|
- |
|
Net
comprehensive (income) loss from discontinued operations |
|
|
(273 |
) |
|
|
(239 |
) |
Net
comprehensive loss after discontinued operations |
|
|
12,897 |
|
|
|
10,457 |
|
Basic
and diluted net loss per Ordinary Share from continuing
operations |
|
|
1.37 |
|
|
|
2.40 |
|
Basic
and diluted net loss (income) per Ordinary Share from discontinuing
operations |
|
|
(0.03 |
) |
|
|
(0.05 |
) |
Basic
and diluted net loss per Ordinary Share |
|
|
1.34 |
|
|
|
2.35 |
|
Weighted average number of Ordinary Shares used to compute basic
and diluted net loss per Ordinary Share |
|
|
9,593,952 |
|
|
|
4,448,449 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED
STATEMENT OF OPERATION: |
U.S. dollars in thousands in thousands (except share
and per share data) |
|
|
|
|
|
|
|
|
Year ended |
|
|
December 31, |
USD
in thousands |
|
2013 |
|
|
2012 |
Net
comprehensive loss after discontinued operations |
|
$ |
12,897 |
|
|
$ |
10,457 |
Stock-based compensation relating to options, RSUs, shares and
warrants granted to employees, non-employees and directors |
|
|
893 |
|
|
|
549 |
Revaluation of warrants related to share purchase agreement |
|
|
(55 |
) |
|
|
635 |
Amortization of discount and change in fair value of embedded
conversion feature in the convertible debenture |
|
|
- |
|
|
|
1,547 |
non-GAAP net loss |
|
$ |
12,059 |
|
|
$ |
7,726 |
|
|
|
|
|
|
|
|
|
|
|
Year ended |
|
|
|
December 31, |
Basic
and diluted per share data |
|
|
2013 |
|
|
|
2012 |
Net
loss after discontinued operations |
|
$ |
1.34 |
|
|
$ |
2.35 |
Stock-based compensation |
|
|
0.09 |
|
|
|
0.12 |
Revaluation of warrants related to share purchase agreement |
|
|
(0.01 |
) |
|
|
0.14 |
Embedded conversion feature in the convertible debenture |
|
|
- |
|
|
|
0.35 |
non-GAAP net loss |
|
$ |
1.26 |
|
|
$ |
1.74 |
|
|
|
|
|
|
|
|
Weighted average number of Ordinary shares used to compute basic
net loss per Ordinary share |
|
|
9,593,952 |
|
|
|
4,448,449 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
2013 |
|
2012 |
Gross
billings |
|
1,091,288 |
|
490,075 |
Unrecognized billings |
|
685,965 |
|
288,864 |
Revenues |
|
405,323 |
|
201,211 |
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended |
|
|
|
|
March 31, 2014 |
|
|
Estimated gross billings |
|
580,000 |
|
|
Unrecognized billings |
|
320,000 |
|
|
Estimated revenues |
|
260,000 |
|
|
|
|
|
|
|
|
|
|
|
|
Company Contact: Rosetta Genomics Ken Berlin President & CEO
(609) 419-9003
investors@rosettagenomics.com Investor Contacts: LHA Anne Marie
Fields (212) 838-3777
afields@lhai.com or Bruce Voss (310) 691-7100
bvoss@lhai.com
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