REHOVOT, Israel and JERSEY CITY, New Jersey, December 5/PRNewswire-FirstCall/ -- Rosetta Genomics, Ltd. (NASDAQ: ROSG), aninnovative molecular diagnostic company leveraging microRNAs as biomarkers,reported today its consolidated financial results for the quarter endedSeptember 30, 2008 and business highlights.
The company recorded revenues for the third quarter of 2008 of $705,000.These revenues were recorded from the date of acquisition of Parkway ClinicalLaboratories at the end of July through September 30, 2008. The companyreported a 2008 third-quarter net loss of $3.0 million, or $0.25 per ordinaryshare. The third-quarter result compares with a net loss of $2.2 million, or$0.18 per ordinary share, for the corresponding quarter of 2007. Net loss forthe nine months ended September 30, 2008 was $10.6 million, or $0.88 perordinary share, compared with a net loss of $6.4 million, or $0.59 perordinary share, for the corresponding period of 2007.
"This has been a very busy quarter for us at Rosetta Genomics, as we nearthe introduction to the market of the first molecular diagnostic tests basedon our technology." said Amir Avniel, President and CEO of Rosetta Genomics."As part of our goal to become a leading player in the molecular diagnosticfield, introducing innovative tests using our proprietary microRNAtechnologies, we have initiated a blood based cancer detection developmentprogram. These tests will potentially use microRNAs extracted from a simpleblood draw, and provide a minimally-invasive detection and screening tool forboth patients and physicians. We have already identified microRNAs in serum,and are now advancing several diagnostic programs based on these findings.
We believe that given their minimally invasive nature, as well as otherimportant advantages, blood-based microRNA tests represent a significantopportunity for us at this stage.
Recently, our commercial efforts have received a significant push withtwo key financial events. We are excited to report our first revenues whichwere generated by Parkway Clinical laboratories, our recently acquiredCLIA-certified lab in Pennsylvania. The second financial event is therepurchase of $7.4 million worth of Rosetta Genomics-held Auction RateSecurities by Credit Suisse in the fourth quarter.
In addition to the commercial achievements we have made during this pastquarter, we have made significant R&D progress. We have recently launched"Rosetta Green" a microRNA-based plant biotechnology project which will focuson the development of a wide range of plant-based applications usingmicroRNAs. This project has been well received by the industry, and we lookforward to its growth and expansion.
This has been an overall excellent quarter for us, and we expect theprogress we have made will continue throughout the remainder of the year."
Financial Overview
Revenues for the third quarter of 2008 were $705,000.
Operating loss for the third quarter were 2008 was $3.1 million(including a non-cash expense of $237,000 related to stock-basedcompensation), compared with an operating loss of $2.6 million (including anon-cash expense of $236,000 related to stock-based compensation) for thecorresponding quarter of 2007. Net loss for the third quarter of 2008 was$3.0 million, or $0.25 per ordinary share, compared with a net loss of $2.2million, or $0.18 per ordinary share, for the corresponding quarter of 2007.
Revenues for the nine months ended September 30, 2008 were $705,000. Netloss for the nine months ended September 30, 2008 was $10.6 million(including a non-cash expense of $ 723,000 related to stock-basedcompensation), or $0.88 per ordinary share, compared with a net loss of $6.4million (including a non-cash expense of $699,000 related to stock-basedcompensation), or $0.59 per ordinary share, for the corresponding period of2007.
Research and development expenses of $2.0 million for the third quarterof 2008 and of $6.6 million for the nine months ended September 30, 2008,compared to $1.4 million and $4.3 million for the corresponding periods of2007, respectively, remain the company's largest expense and accounted for64% of its operating loss in the third quarter of 2008.
As of September 30, 2008, we had $12.9 million in cash, cash equivalents,short term bank deposits, and marketable securities. Our outlook of totalcash usage for operating activities for the remaining three months of 2008 isapproximately $3 million. In July 2008 we paid $1.9 million in cash for thepurchase of Parkway Clinical Laboratories, Inc.
As previously disclosed, the company has recorded an impairment chargerelating to $7.4 million in Auction Rate Securities (ARS), purchased in 2007,which have experienced multiple failed auctions due to a lack of liquidity inthe markets for these securities. As part of a settlement agreement itreached with the Attorney General of the State of New York and the NorthAmerican Securities Administrators Association Task Force, Credit Suisseagreed to repurchase these ARS from Rosetta. Credit Suisse has repurchasedthe entire $7.4 million.
Recent Highlights
Rosetta Genomics reports the following scientific and corporatehighlights:
Diagnostic Programs
- miRview(TM) squamous - Rosetta has recently completed the developmentof this test at its Philadelphia lab. The test differentiates squamous fromnon squamous non-small cell lung cancer (NSCLC) with high sensitivity andspecificity. The ability of physicians to accurately differentiate squamousfrom non-squamous NSCLC is an important treatment guide. Bevacizumab, anangiogenesis inhibitor and an important new modality of therapy fornon-squamous NSCLC, includes a black-box warning about substantially higherrates of severe or fatal hemorrhage among patients with squamous NSCLChistology compared with non-squamous NSCLC. In addition, several othertargeted drugs for NSCLC currently under development may require this type ofsensitive differentiation.
- miRview(TM) mets - This test is designed to identify the primary originof a metastasis, and is currently in the final stages of development. Thistest is for patients who have been identified with a metastasis, includingCUP (cancer of unknown primary) patients, and need the primary originidentified so that proper treatment may be administered.
- miRdicator meso - This test, developed by Columbia University MedicalCenter, based on Rosetta Genomics' technology, has recently been filed forclinical use with the New York State Department of Health. It is designed todifferentiate between mesothelioma and adenocarcinomas in the lung. This iscritical for optimal therapy, but it is often difficult to differentiatethese tumors. Currently, there is no objective, standardized test to aidpathologists in differentiating between the many possible tumors in the lungand pleura.
Therapeutic Programs
- The company's therapeutic collaboration with Isis Pharmaceuticals(Nasdaq: ISIS), focused on the development of microRNA-based therapeutics forhepatocellular carcinoma has been transferred to Regulus Therapeutics.Regulus, a joint venture between Alnylam Pharmaceuticals and IsisPharmaceuticals focused on the development of microRNA-based therapeutics,and Rosetta Genomics will continue collaborating under the same terms andconditions. This project is partially funded by the Israel-U.S. BinationalIndustrial Research and Development (BIRD) foundation.
Collaborations and Licensing
- Johns Hopkins University School of Medicine has initiated a clinicalassessment study to compare Rosetta Genomics' miRview(TM) squamous, whichdifferentiates squamous from non squamous non small cell lung cancer, withavailable immunohistochemistry methods.
- Initiated a collaboration with the National Institute of Health (NIH)to identify microRNAs involved in the progression of the HumanImmunodeficiency Virus (HIV), that may be used as potential drug targets.
Publications
- Published results of a study conducted by Rosetta Genomics' scientistsdescribing the identification of microRNA biomarkers in blood serum. Thefindings, published online in the peer-reviewed journal PLOS One, demonstratethat microRNAs have the potential to be used as clinical biomarkers for awide range of indications in cancer and women's health.
- A collaborative study published online in Biochemical and BiophysicalResearch Communications, by scientists from the Weizmann Institute of Scienceand scientists at Sheba Medical Center, with the aid of Rosetta Genomics, hasdemonstrated that a microRNA first disclosed by the company increased theefficacy of Imatinib (Gleevec(R)) in Glioblastoma (GBM), the most common andmost aggressive type of primary brain tumor.
Conferences and Events
Rosetta Genomics presented at the following conferences and
events:
- Maxim Group Growth Conference, New York City, October, 2008.
- EORTC-NCI-ASCO Annual Meeting on "Molecular Markers in
Cancer". October 2008, Florida.
- Oppenheimer 19th Annual Healthcare Conference. November
2008, New York City.
- AACR's centennial conference "Translational Cancer Medicine
2008: Bridging the Lab and Clinic in Cancer Medicine" Molecular
Diagnostics in Cancer Therapeutic Development conference. November
2008, Jerusalem, Israel.
- Rodman & Renshaw 10th Annual Healthcare Conference. November
2008, New York City.Conference Call Information
Rosetta Genomics will host a conference call at 08:00 a.m. ET today todiscuss third-quarter activities and recent corporate developments. To accessthe live conference call, U.S. and Canadian participants may dial1-866-966-5335; international participants may dial +44-20-3023-4460. Toaccess the 24-hour audio replay, U.S. and Canadian participants may dial1-866-583-1035; international participants may dial +44-20-8196-1998. Theaccess code for the replay is 181543#. The replay will be available untilDecember 12, 2008.
A live audio webcast of the call will also be available on the"Investors" section of the company's website http://www.rosettagenomics.com.An archived webcast will be available on the Company's website approximatelytwo hours after the event, and will be archived for 30 days thereafter.
About microRNAs
MicroRNAs (miRNAs) are recently discovered, naturally occurring, smallRNAs that act as master regulators and have the potential to form the basisfor a new class of diagnostics and therapeutics. Since many diseases arecaused by the abnormal activity of proteins, the ability to selectivelyregulate protein activity through microRNAs could provide the means to treata wide range of human diseases. In addition, microRNAs have been shown tohave different expression in various pathological conditions. As a result,these differences may provide for a novel diagnostic strategy for manydiseases.
About Rosetta Genomics
Rosetta Genomics (Nasdaq: ROSG) is a leader in the field of microRNAs.Founded in 2000, the company's integrative research platform combiningbioinformatics and state-of-the-art laboratory processes has led to thediscovery of hundreds of biologically validated novel human microRNAs.Building on its strong IP position and proprietary platform technologies,Rosetta Genomics is working on the application of these technologies in thedevelopment of a full range of microRNA-based diagnostic and therapeutictools, focusing primarily on cancer and various women's health indications.
Forward-Looking Statement Disclaimer
Various statements in this release concerning Rosetta's futureexpectations, plans and prospects, including without limitation, statementsrelating to the role of microRNAs in human physiology and disease, thepotential of microRNAs in the development of therapeutics and diagnosticproducts, the progress and timing of our diagnostic and therapeutic programs,including the expected launch of the first diagnostic tests applying RosettaGenomics' technology in 2008, and Rosetta's expected cash usage in the fourthquarter of 2008 constitute forward-looking statements for the purposes of thesafe harbor provisions under The Private Securities Litigation Reform Act of1995. Actual results may differ materially from those indicated by theseforward-looking statements as a result of various important factors,including risks related to: the continued uncertainty in the credit andcapital markets; other changes in general economic and business conditions;Rosetta's approach to discover and develop novel diagnostics products, whichis unproven and may never lead to marketable products or services; Rosetta'sability to fund and the results of pre-clinical and clinical trials;Rosetta's ability to obtain, maintain and protect the intellectual propertyutilized by Rosetta's products; Rosetta's ability to enforce its patentsagainst infringers and to defend its patent portfolio against challenges fromthird parties; Rosetta's ability to obtain additional funding to support itsbusiness activities; Rosetta's dependence on third parties for development,manufacture, marketing, sales, and distribution of products and services; thesuccessful development of diagnostic and therapeutic products applyingRosetta's technology,; Rosetta's ability to obtain regulatory clearances orapprovals for products, as may be required under applicable laws; competitionfrom others using technology similar to Rosetta's and others developingproducts for similar uses; Rosetta's dependence on collaborators; the abilityto obtain coverage and payment from health plans and payers for diagnosticand therapeutic products applying Rosetta's technology and Rosetta's shortoperating history; as well as those risks more fully discussed under "KeyInformation - Risk Factors" in Rosetta's Annual Report on Form 20-F for theyear ended December 31, 2007 on file with the Securities and ExchangeCommission. In addition, any forward-looking statements represent Rosetta'sviews only as of today and should not be relied upon as representing itsviews as of any subsequent date. Rosetta does not assume any obligation toupdate any forward-looking statements unless required by law.
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
Nine months Three months
ended September 30, ended September 30,
2008 2007 2008 2007
Unaudited Unaudited
Revenues $ 705 $ - $ 705 $ -
Cost of revenues 360 - 360 -
Gross Profit $ 345 $ - $ 345 $ -
Operating expenses:
Research and
development, net $ 6,566 $ 4,287 $ 1,995 $ 1,423
Marketing and
business development 1,515 1,181 570 394
General and
administrative 2,628 2,046 903 771
Total Operating
Expenses 10,709 7,514 3,468 2,588
Operating
loss 10,364 7,514 3,123 2,588
Financial expenses
(income) net 195 (1,079) (139) (424)
Net
loss $ 10,559 $ 6,435 $ 2,984 $ 2,164
Basic and diluted
net loss per
Ordinary share . $ 0.88 $ 0.59 $ 0.25 $ 0.18
Weighted average
number of Ordinary
shares used to
compute basic and
diluted net loss per
Ordinary share $ 11,993,425 10,877,274 12,119,510 11,866,824
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)
September 30, December 31,
2008 2007
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents $ 9,982 $ 13,590
Short-term bank
deposits 112 112
Marketable
securities 2,782 8,251
Trade receivables, net 370 -
Other accounts
receivable and
prepaid expenses 445 297
Total current
assets 13,691 22,250
LONG-TERM
INVESTMENTS - 2,391
SEVERANCE PAY
FUND 149 144
PROPERTY AND EQUIPMENT,
NET 1,371 1,253
GOODWILL 2,733 -
OTHER
ASSETS 359 -
Total assets $ 18,303 $ 26,038
LIABILITIES AND SHAREHOLDERS'
EQUITY CURRENT LIABILITIES:
Current maturities of
capital lease and of
long-term loan $ 57 $ 247
Trade
payables 919 516
Other accounts payable and
accruals 1,134 1,102
Total current
liabilities 2,110 1,865
LONG-TERM LIABILITIES:
Long-term bank loan
and capital lease 48 16
Convertible loan 750 -
Deferred
revenue 228 228
Accrued severance
pay 320 324
Total Long-term
Liabilities 1,346 568
COMMITMENTS AND CONTINGENT LIABILITIES
SHAREHOLDERS' EQUITY:
Share
capital: 34 27
Additional paid-in
capital 60,733 58,984
Other comprehensive
income 131 86
Deficit accumulated
during the development
stage (46,051) (35,492)
Total shareholders'
equity 14,847 23,605
Total liabilities and
shareholders' equity $ 18,303 $ 26,038
Contact:
Media& Investors
Ron Kamienchick
T: +1-646-509-1893
E: [email protected]Source: PRNewsWire
