Response Genetics Inc. (RGDX) filed Quarterly Report for the period ended 2009-06-30.
Response Genetics Inc. is engaged in the research and development of pharmacogenomic cancer diagnostic tests based on its proprietary and patented technologies which enable extraction and analysis of genetic information from genes derived from tumor samples stored as formalin-fixed and paraffin embedded specimens. RGI currently generates revenue primarily from the sales of its proprietary analytical pharmacogenomic testing services of clinical trial specimens to the pharmaceutical industry. Response Genetics Inc. has a market cap of $24.6 million; its shares were traded at around $2.01 with and P/S ratio of 3.5.
Highlight of Business Operations:
Cost of Revenues. Cost of revenues for the quarter ended June 30, 2009 were $1,278,546 as compared to $905,134 for the quarter ended June 30, 2008, an increase of $373,412 or 41.3%. This increase is primarily related to an increase of $362,290 in processing costs associated with our sample processing relationship with Hitachi in Japan which did not exist in 2008, offset by a reduction of $27,617 in costs associated with our fluorescent in situ hybridization assays.
Research and Development Expenses. Research and development expenses were $433,107 for the quarter ended June 30, 2009, as compared to $705,159 for the same period in 2008, a decrease of $272,052 or 38.6 %. This decrease resulted primarily from a decrease in personnel costs of $95,650, a decrease in business consulting expenses of $97,661, and a decrease in patent related legal fees of $113,754. We expect research and development expenses to increase as we continue work to develop additional aspects of our technology and to study diagnostic indicators for various forms of cancer.
General and Administrative Expenses. General and administrative expenses totaled $1,398,346 for the quarter ended June 30, 2009, as compared to $1,867,010 for the comparable period in 2008, a decrease of $468,664 or 25.1%. This decrease resulted primarily from a reduction of $153,271 in staff salary and benefits expenses, a decrease in stock option expense of $122,053, a reduction of $66,825 in legal and accounting fees, and a reduction of $131,005 in business consulting expenses. These costs were partially offset by an increase of $69,166 related to changes in the estimated useful lives of certain property and equipment. We expect general and administrative expenses to increase as a result of the need to hire additional administrative personnel due to higher legal, accounting, compliance and related expenses associated with being a public company and to support the growth of ResponseDX.
Cost of Revenues: Cost of revenues for the six month period ended June 30, 2009 were $2,470,743 as compared to $1,824,099 for the same period ended June 30, 2008, an increase of $646,644 or 35.5%. This increase is primarily related to an increase of $691,158 associated with our sample processing relationship with Hitachi in Japan which did not exist in 2008. This increase was partially offset by $27,617 decrease in costs associated with in situ fluorescence hybridization..
Research and Development Expenses. Research and development expenses were $1,007,527 for the six month period ended June 30, 2009, as compared to $1,308,544 for the same period in 2008, a decrease of $301,017 or 23%. This decrease resulted primarily from a decrease in personnel costs of $133,090, a decrease in laboratory supply costs and microarray supplies of $59,716, and a decrease of $115,239 in business consulting expenses. We expect research and development expenses to increase as we continue work to develop additional aspects of our technology and to study diagnostic indicators for various forms of cancer.
General and Administrative Expenses. General and administrative expenses totaled $3,147,957 for the six month period ended June 30, 2009, as compared to $3,495,916 for the comparable period in 2008, a decrease of $347,959 or 10.0%. This decrease resulted primarily from a decrease in salary and benefits costs of $151,491, a decrease in stock option expense of $104,390, a reduction of $128,795 in legal and accounting fees. These costs were partially offset by an increase of $69,166 in related to changes in the estimated useful lives of certain property and equipment. We expect general and administrative expenses to increase as a result of the need to hire additional administrative personnel and due to higher legal, accounting, compliance and related expenses associated with being a public company and to support the growth of ResponseDX.
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