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Rosetta Genomics Reports Financial Results for the First Six Months of 2013

Rosetta Genomics Reports Financial Results for the First Six Months of 2013 
Demonstrating Increased Demand for the Rosetta Cancer Origin Test;
Business Update Conference Call Begins at 10:00 a.m. Eastern Time
Today 
PRINCETON, NJ and REHOVOT, ISRAEL -- (Marketwired) -- 09/10/13 -- 
Rosetta Genomics, Ltd. (NASDAQ: ROSG), a leading developer of
microRNA-based molecular diagnostics, today reports financial results
for the six months ended June 30, 2013.  
Commercial highlights for the first half of 2013 and recent weeks
include:  


 
--  Enhanced awareness of, and demand generation for, the Rosetta Cancer
    Origin Test(TM) resulting in a four-fold increase in revenues
    compared with the same period a year ago
--  Expanded the U.S. commercial footprint from five sales territories to
    12, and increased the direct sales force from four representatives to
    10; brought sales professionals in house from contract sales
    organization
--  Received the final revised Local Coverage Determination for Biomarkers
    in Oncology from the designated Medicare Administrative Contractor for
    the Company's microRNA-based diagnostic assays, which included the
    Rosetta Cancer Origin Test; the Determination became effective August
    1, 2013
--  Executed credentialing agreements for the Rosetta Cancer Origin Test
    with four U.S. national healthcare network providers, increasing
    coverage for this test to approximately 100 million Americans
--  Highlighted the Company's cancer testing services in an Industry
    Expert Theater Presentation at the American Society of Clinical
    Oncology 2013 Annual Meeting (ASCO 2013)
--  Closed the six-month period with a strong cash position of nearly $30
    million to support commercial expansion and product development

  
Management Commentary  
"During the first half of 2013 we made meaningful progress in a
number of areas critical to our future success including commercial
progress with the Rosetta Cancer Origin Test. We fortified our patent
estate, published data in peer-reviewed journals in support of our
products, executed credentialing agreements with several large
network providers and received a favorable local coverage
determination from our Medicare Administrative Contractor," said
Kenneth A. Berlin, President and Chief Executive Officer of Rosetta
Genomics. "Based on the traction we gained in the first half of 2013,
we expanded our U.S. sales force from five to 12 sales territories
and recently completed training six new sales representatives who
have already begun generating demand for our Cancer Origin Test. 
"In further support of the commercialization of our microRNA testing
services, we had a strong presence at ASCO 2013, the world's largest
annual gathering of cancer specialists. We hosted an Industry Expert
Theater Presentation, a prestigious program highlighted by a series
of hour-long presentations from industry leaders sharing the latest
in oncology practices, products, services and technologies. Also at
ASCO 2013, we launched new corporate and product branding, which
included an interactive tradeshow booth featuring a high-definition
video and other promotional materials, an updated corporate logo with
the tagline 'expanding personalized medicine,' and new names and
logos for our Rosetta Cancer Testing Services, all of which were
extremely well received.  
"We continue to protect our global leadership position in microRNA
technology and our resulting diagnostic and therapeutic products with
a purposeful patent strategy. Our solid intellectual property
position 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 IP. 
"We are putting the pieces in place to build on our recent commercial
momentum and expect our expanded sales force along with increasing
awareness of the Rosetta Cancer Origin Test to result in revenue
growth during the second half of the year," concluded Mr. Berlin. 
Six Month Financial Results  


 
--  For the six months ended June 30, 2013, the Company recorded revenues
    from continuing operations of $193,000, a nearly four-fold increase
    compared with $51,000 for the first six months of 2012.
    
    
--  Total billings for the first half of 2013 increased to $416,000 from
    $281,000 for the first half of 2012. The increase is due to the
    increased demand generated by our U.S. sales and marketing efforts.
    
    
--  Cost of revenues increased to $434,000 for the first half of 2013 from
    $115,000 for the first half of 2012. The increase is primarily
    attributed to higher volume of processed samples as well as a ramp up
    in personnel and infrastructure to meet current and future volume.
    
    
--  Research and development expenses for the first half of 2013 increased
    to $877,000 from $740,000 for the same period one year ago due to an
    overall increase in activity and personnel.
    
    
--  Marketing and business development expenses for the first six months
    of 2013 increased to $3.6 million from $1.2 million in the prior year,
    primarily due to the Company's ongoing investment in its U.S.
    commercialization efforts.
    
    
--  For the first half of 2013, general and administrative expenses were
    $2.0 million compared with $1.4 million in the same period last year,
    with the increase primarily due to higher overhead as the Company
    added key executives and other personnel.
    
    
--  The operating loss for the first six months of 2013 was $6.7 million,
    including $467,000 of non-cash stock-compensation expense. This
    compares with an operating loss for the first six months of 2012 of
    $3.4 million, including $158,000 of non-cash stock-compensation
    expense.
    
    
--  The Company's net loss after discontinued operations for the 2013
    six-month period was $6.3 million or $0.68 per ordinary share on 9.2
    million shares outstanding, compared with a net loss after
    discontinued operations for the 2012 six-month period of $6.6 million
    or $5.35 per ordinary share on 1.2 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 the first
    six months of 2013 was $5.9 million or $0.64 per ordinary share,
    compared with a net loss the first six months of 2012 of $4.0 million
    or $3.25 per ordinary share.
    
    
--  Details reconciling non-GAAP amounts with GAAP amounts are provided in
    the table below.
    
    
--  As of June 30, 2013, Rosetta Genomics had $28.9 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 $5.5 million in cash to fund operations through June 30,
    2013. The mid-year cash position included $3.0 million from the sale
    of 722,260 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.
    
    
--  The Company plans to continue to invest in the expansion of its U.S.
    comme
rcial operations and will fund further clinical development of
    its microRNA technology. As a result, the Company estimates that cash
    requirements to fund operations in the second half of 2013 will be in
    the range of $6 million to $7 million. Rosetta Genomics believes that
    its cash balance of $28.9 million as of June 30, 2013, combined with
    projected revenue growth, will be sufficient to fund operations into
    2015.

  
Conference Call
 Rosetta Genomics management will host a conference
call today beginning at 10:00 a.m. Eastern time to discuss these
financial results and recent corporate developments, and 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 51980908. 
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 51980908. The replay will be available through September 16, 2013. 
A live audio webcast of the call will also be available in the
"Investors" section of the Company's website at
www.rosettagenomics.com. 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 (formerly the miRview(R)
product line)
 Rosetta Cancer Tests are a series of microRNA-based
diagnostic testing services offered by Rosetta Genomics. The Rosetta
Cancer Origin Test(TM) can accurately identify the primary tumor type
in primary and metastatic cancer including cancer of unknown or
uncertain primary (CUP). Rosetta Mesothelioma Test(TM) diagnoses
mesothelioma, a cancer connected to asbestos exposure. The Rosetta
Lung Cancer Test(TM) accurately identifies the four main subtypes of
lung cancer using small amounts of tumor cells. The Rosetta Kidney
Cancer Test(TM) 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(TM), 60,000 from
the Rosetta Mesothelioma Test(TM), 65,000 from the Rosetta Kidney
Cancer Test(TM) and 226,000 patients from the Rosetta Lung Cancer
Test(TM). 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 or toll free (U.S.) 1-888-522-7971. 
About Rosetta Genomics
 Rosetta develops and commercializes a full
range of microRNA-based molecular diagnostics. 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. 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. 
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 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 Cancer of Origin
Test(TM), Rosetta's development or commercialization of molecular
diagnostics, the market acceptance of Rosetta's cancer testing
services, particularly the Rosetta Cancer Origin Test(TM), Rosetta's
development of personalized medicine products and services 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. 
-Financial Tables to Follow- 


 
                                                                            
                                                                            
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS                               
U.S. dollars in thousands                                                   
                                                                            
                                                   June 30,    December 31, 
                                
                     2013          2012     
                                                 ------------  ------------ 
                                                   Unaudited                
    ASSETS                                                                  
CURRENT ASSETS:                                                             
  Cash and cash equivalents                      $     18,931  $     30,798 
  Restricted cash                                          35            34 
  Short-term bank deposits                              9,980           130 
  Trade receivables                                       185            88 
  Other accounts receivable and prepaid expenses          446           568 
  Current assets of discontinued operations                 -           135 
                                                 ------------  ------------ 
                                                                            
Total current assets                                   29,577        31,753 
                                                 ------------  ------------ 
                                                                            
LONG-TERM ASSETS:                                                           
  Long-term account receivable                             11             7 
  Property and equipment, net                             697           546 
  Long-term asset of discontinued operations                -           224 
                                                 ------------  ------------ 
                                                                            
Total long-term assets                                    708           777 
                                                 ------------  ------------ 
Total assets                                     $     30,285  $     32,530 
                                                 ============  ============ 
                                                                            
    LIABILITIES AND SHAREHOLDERS' EQUITY                                    
CURRENT LIABILITIES:                                                        
  Trade payables                                 $      1,091  $        754 
  Other accounts payable and accruals                     948           512 
                                                 ------------  ------------ 
                                                                            
Total current liabilities                               2,039         1,266 
                                                 ------------  ------------ 
                                                                            
LONG-TERM LIABILITIES:                                                      
  Warrants related to share purchase agreements            80           136 
  Deferred revenue                                        228           228 
                                                                            
Total long-term liabilities                               308           364 
                                                 ------------  ------------ 
                                                                            
COMMITMENTS AND CONTINGENCIES                                               
SHAREHOLDERS' EQUITY                                                        
  Share capital:                                                            
    Ordinary shares of NIS 0.6 par value:                                   
     20,000,000 and 2,000,000 shares authorized                             
     at June 30, 2013 and December 31, 2012,                                
     respectively; 9,822,865 and 9,099,805 shares                           
     issued at June 30, 2013 and December 31,                               
     2012, respectively; 9,819,607 and 9,096,547                            
     shares outstanding at June 30, 2013 and                                
     December 31, 2012, respectively                    1,498         1,379 
  Additional paid-in capital                          128,235       125,023 
  Accumulated deficit                               (101,795)      (95,502) 
                                                 ------------  ------------ 
                                                                            
Total shareholders' equity                             27,938        30,900 
                                                 ------------  ------------ 
Total liabilities and shareholders' equity       $     30,285  $     32,530 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF LOSS                           
U.S. dollars in thousands (except share and per share data)                 
                                                                            
                                                       Six months ended     
                                                           June 30,         
                                                   ------------------------ 
                                                       2013         2012    
                                                   -----------  ----------- 
                                                           Unaudited        
                                                   ------------------------ 
                                                                            
Revenues                                           $       193  $        51 
Cost of revenues                                           434          115 
                                                   -----------  ----------- 
                                                                            
Gross loss                                                 241           64 
                                                   -----------  ----------- 
                                                                            
Operating expenses:                                                         
                                                                            
  Research and development, net                            877          740 
  Marketing and business development                     3,563        1,181 
  General and administrative                             1,989        1,402 
                                                   -----------  ----------- 
                                                                            
Total operating expenses                                 6,429        3,323 
                                                                            
Operating loss          
                                 6,670        3,387 
Financial loss (income), net                              (104)       3,302 
                                                   -----------  ----------- 
                                                                            
Loss from continuing operations                          6,566        6,689 
Net income from discontinued operations                    273          105 
                                                   -----------  ----------- 
                                                                            
Net loss after discontinued operations             $     6,293  $     6,584 
                                                   ===========  =========== 
                                                                            
Basic net loss per Ordinary share from continuing                           
 operations attributable to Rosetta Genomics'                               
 shareholders                                      $      0.71  $      5.43 
                                                   ===========  =========== 
                                                                            
Diluted net loss per Ordinary share from continuing                         
 operations attributable to Rosetta Genomics'                               
 shareholders                                      $      0.71  $      5.39 
                                                   ===========  =========== 
                                                                            
Basic and diluted net income per Ordinary share of                          
 discontinued operations attributable to Rosetta                            
 Genomics' shareholders                            $     (0.03) $     (0.08)
                                                   ===========  =========== 
                                                                            
Basic net loss per Ordinary share attributable to                           
 Rosetta Genomics' shareholders                    $      0.68  $      5.35 
                                                   ===========  =========== 
                                                                            
Diluted net loss per Ordinary share attributable to                         
 Rosetta Genomics' shareholders                    $      0.68  $      5.31 
                                                   ===========  =========== 
                                                                            
Weighted average number of Ordinary shares used to                          
 compute basic net loss per Ordinary share           9,213,633    1,231,170 
                                                   ===========  =========== 
                                                                            
Weighted average number of Ordinary shares used to                          
 compute diluted net loss per Ordinary share         9,215,175    1,239,521 
                                                   ===========  =========== 
                                                                            
                                                                            
                                                                            
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENT OF OPERATION:     
U.S. dollars in thousands in thousands (except share and per share data)    
                                                                            
                                                        Six months ended    
                                                            June 30,        
                                                        2013         2012   
                                                    -----------  -----------
Net loss after discontinued operations              $     6,293  $     6,584
Stock-based compensation                                    467          158
Revaluation of warrants related to share purchase                           
 agreement                                                  (56)         355
Embedded conversion feature in the convertible                              
 debenture                                                    -        2,064
                                                    -----------  -----------
non-GAAP net loss                                   $     5,882  $     4,007
                                                    ===========  ===========

  
Company Contact: 
Rosetta Genomics 
Ken Berlin
President & CEO 
(609) 419-9000, ext. 1326 
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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