Response Genetics, Inc. Announces Third Quarter Financial Results

      Response Genetics, Inc. Announces Third Quarter Financial Results

--- Revenue increases to $5.4 million ---

--- Third consecutive quarter of increased gross margin coupled with
significant decrease in net loss ---

PR Newswire

LOS ANGELES, Nov. 13, 2012

LOS ANGELES, Nov. 13, 2012 /PRNewswire/ --Response Genetics, Inc. (Nasdaq:
RGDX), a company focused on the development and sale of molecular diagnostic
tests for helping determine a patient's response to cancer therapy, today
announced its consolidated financial results for the third quarter ended
September 30, 2012.

Total revenues for the quarter ended September 30, 2012 increased to $5.40
million, compared to $3.84 million for the quarter ended June 30, 2012 and
$5.10 million for the quarter ended September 30, 2011. The Company's
pharmaceutical client revenue increased by $1.37 million and the ResponseDX®
revenue increased by $189 thousand relative to the quarter ended June 30,
2012.

The Company's net loss for the quarter ended September 30, 2012 decreased by
$1.3 million to $1.4 million compared to a net loss of $2.7 million for the
quarter ended June 30, 2012 and a net loss of $1.4 million for the quarter
ended September 30, 2011. This is the third consecutive quarter the Company
decreased its net loss.

The Company also increased its gross margin in three consecutive quarters from
approximately 25% for the fourth quarter of 2011, to approximately 32% for the
quarter ended March 31, 2012 to approximately 37% for the quarter ended June
30, 2012, to approximately 49% for the quarter ended September 30, 2012.
Gross margin is Net Revenue less Cost of Revenue.

Excluding cost of revenue, total operating expenses for the third quarter were
$4.0 million, compared to $4.1 million for the quarter ended June 30, 2012 and
$4.0 million for the same period last year.

"We are very pleased with the financial results for the quarter ended
September 30, 2012, which improved again relative to the prior quarter. Since
the fourth quarter of last year, we continued to realize consecutive
quarter-over-quarter positive results from the many changes implemented by the
Company. Gross margins have increased nearly two-fold from the fourth quarter
of last year, and operating loss has continued to decrease significantly, or
nearly two-fold, since last quarter and by a factor of nearly 2.8 from the
fourth quarter of last year," said Thomas Bologna, the Company's Chairman &
Chief Executive Officer.

Total revenues for the nine months ended September 30, 2012 were $13.2 million
compared to $17.7 million for the nine months ended September 30, 2011. The
decrease is largely a result of the expected decrease in pharmaceutical client
revenue of $3.9 million from $8.3 million for the nine months ended September
30, 2011 to $4.4 million for the nine months ended September 30, 2012.
Additionally, early in 2012, the Company made the strategic decision to focus
much of its pharmaceutical resources on working with GSK as it moves its
drugs, for which the Company did extensive patient testing, through the FDA
approval process. The Company's ResponseDX® revenue was $8.8 million for the
nine months ended September 30, 2012, compared to $9.4 million for the nine
months ended September 30, 2011, largely as a result of tactical changes the
Company is undergoing in building and directing its sales force.

The Company's net loss for the nine months ended September 30, 2012 was $7.3
million, compared with a net loss of $1.8 million for the nine months ended
September 30, 2011.

Excluding cost of revenue, total operating expenses for the nine months were
$12.5 million, compared to $11.4 million for the same period last year. The
increase in total operating expense of $1.1 million was due to an increase in
general and administrative expenses of $0.2 million and an increase in
research and development expenses of $0.9 million.

The Company's cash position increased substantially to $10.8 million at
September 30, 2012 compared to $2.6 million at June 30, 2012.

Mr. Bologna concluded, "In the third quarter we also increased our cash
position significantly to nearly $11,000,000. Today we have a strong balance
sheet coupled with steady and consecutive quarter-over-quarter financial
performance. Going forward, we believe we are well positioned, both
strategically and financially, to continue building a strong organization to
capitalize on the promise of personalized medicine."

Conference Call Details

To access the conference call by phone on November 13 at 10:00 a.m. EST, dial
(800) 537-0745 or (253) 237-1142 for international participants. A telephone
replay will be available beginning approximately two hours after the call
through November 20, 2012, and may be accessed by dialing (855) 859-2056 or
(404) 537-3406. The conference passcode for both the live call and replay is
57580014.

To access the live and archived webcast of the conference call, go to the
Investor Relations section of the Company's Web site at
http://investor.responsegenetics.com. It is advised that participants connect
at least 15 minutes prior to the call to allow for any software downloads that
might be necessary.

About Response Genetics, Inc.
Response Genetics, Inc. (the "Company") is a CLIA-certified clinical
laboratory focused on the development and sale of molecular diagnostic testing
services for cancer. The Company's technologies enable extraction and
analysis of genetic information derived from tumor cells stored as
formalin-fixed and paraffin-embedded specimens. The Company's principal
customers include oncologists and pathologists. In addition to diagnostic
testing services, the Company generates revenue from the sale of its
proprietary analytical pharmacogenomic testing services of clinical trial
specimens to the pharmaceutical industry. The Company's headquarters is
located in Los Angeles, California. For more information, please visit
www.responsegenetics.com.

Forward-Looking Statement Notice

Except for the historical information contained herein, this press release and
the statements of representatives of the Company related thereto contain or
may contain, among other things, certain forward-looking statements, within
the meaning of the Private Securities Litigation Reform Act of 1995.

Such forward-looking statements involve significant risks and uncertainties.
Such statements may include, without limitation, statements with respect to
the Company's plans, objectives, projections, expectations and intentions,
such as the ability of the Company, to provide clinical testing services to
the medical community, to continue to strengthen and expand its sales force,
to continue to build its digital pathology initiative, to attract and retain
qualified management, to continue to strengthen marketing capabilities, to
expand the suite of ResponseDX® products, to continue to provide clinical
trial support to pharmaceutical clients, to enter into new collaborations with
pharmaceutical clients, to enter into areas of companion diagnostics, to
continue to execute on its business strategy and operations, to continue to
analyze cancer samples and the potential for using the results of this
research to develop diagnostic tests for cancer, the usefulness of genetic
information to tailor treatment to patients, and other statements identified
by words such as "project," "may," "could," "would," "should," "believe,"
"expect," "anticipate," "estimate," "intend," "plan" or similar expressions.

These statements are based upon the current beliefs and expectations of the
Company's management and are subject to significant risks and uncertainties,
including those detailed in the Company's filings with the Securities Exchange
Commission. Actual results, including, without limitation, actual sales
results, if any, or the application of funds, may differ from those set forth
in the forward-looking statements. These forward-looking statements involve
certain risks and uncertainties that are subject to change based on various
factors (many of which are beyond the Company's control). The Company
undertakes no obligation to publicly update forward-looking statements,
whether because of new information, future events or otherwise, except as
required by law.

Investor Relations Contact: Company Contact:
Peter Rahmer                Thomas A. Bologna
Trout Group                 Chairman & Chief Executive Officer
646-378-2956                323-224-3900



RESPONSE GENETICS, INC.



CONDENSED CONSOLIDATED BALANCE SHEETS


                                                December 31,    September 30,
                                                2011            2012
                                                                (Unaudited)
Cash and cash equivalents                       $ 1,700,295     $ 10,839,201
Accounts receivable, net                          4,047,059       4,383,958
Prepaid expenses and other current assets         991,351         447,494
Total current assets                              6,738,705       15,670,653
Property and equipment, net                       1,045,287       1,026,562
Intangible assets                                 66,815          464,010
Total assets                                    $ 7,850,807     $ 17,161,225
Accounts payable                                $ 1,492,526     $ 1,348,241
Accrued expenses                                  3,251,262       2,134,038
Deferred Revenue                                  -               803,481
Other current liabilities                         1,149,253       1,158,821
Total current liabilities                         5,893,041       5,444,581
Other liabilities                                 240,928         122,021
Common stock classified outside of                7,854,682       19,575,724
stockholders' equity (deficit)
Total stockholders' equity (deficit)              (6,137,844)     (7,981,101)
Total liabilities, common stock classified
outside of stockholders' equity                 $ 7,850,807     $ 17,161,225

(deficit) and stockholders' equity (deficit)

The condensed consolidated balance sheet at December 31, 2011 is derived from
the audited consolidated financial statements at the date included in the
Company's Form 10-K for the fiscal year ended December 31, 2011. The
condensed consolidated balance sheet at September 30, 2012 is derived from the
unaudited financial statements included in the Company's Form 10-Q for the
quarter ended September 30, 2012.



RESPONSE GENETICS, INC.



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS


                    Three MonthsEnded            Nine Months Ended

                    September 30,                  September 30,

                    (Unaudited)                    (Unaudited)
                    2011            2012           2011         2012
Net revenue         $ 5,100,649     $ 5,403,537    $          $  
                                                   17,730,785  13,220,188
Operating
expenses:
 Cost of revenue    2,538,176       2,768,894    8,040,003    7,895,870
 Selling and        1,251,054       1,195,988    4,107,639    4,145,115
marketing
 General and        2,268,517       2,407,544    6,493,079    6,686,559
administrative
 Research and       452,734         426,105      838,622      1,695,851
development
Total operating       6,510,481       6,798,531    19,479,343   20,423,395
expenses
Operating loss        (1,409,832)     (1,394,994)  (1,748,558)  (7,203,207)
Other income
(expense):
 Interest           (5,804)         (20,497)     (11,379)     (66,556)
expense
 Interest income    96              3            162          24
Net loss              (1,415,540)     (1,415,488)  (1,759,775)  (7,269,739)
Unrealized gain
(loss) on foreign
currency              (25,593)        968          (25,593)     (1,338)

translation
Comprehensive loss  $ (1,441,133)   $ (1,414,520)  $         $ 
                                                   (1,785,368)  (7,271,077)
Net loss per                                       $       $     
share—basic and   $ (0.07)        $ (0.05)         (0.09)   (0.29)
diluted
Weighted-average
common
shares—basic and    19,537,232      26,362,842   18,979,010   24,709,185

diluted

The condensed consolidated statement of operations at September 30, 2011 and
2012 are derived from the unaudited financial statements included in the
Company's Form 10-Q for the quarter ended September 30, 2012.



SOURCE Response Genetics, Inc.

Website: http://www.responsegenetics.com
 
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