Cancer Genetics, Inc. Announces Fourth Quarter and Year-End 2013 Results,
Provides Corporate Update
*72% Year-Over-Year Revenue Growth During Fourth Quarter 2013
*54% Full Year 2013 Revenue Growth Achieving $6.6 Million For 2013
*Gross Margins Increased Threefold to 25.5% for Full Year 2013 from 8.7% in
*Increased Sales & Marketing Team During Fourth Quarter To Have National
Presence & Increased Focus on Hospitals and Cancer Centers
*Conference Call Scheduled for Today, Wednesday, March 26, 2014, at 4:30
p.m. Eastern Time
RUTHERFORD, N.J., March 26, 2014 (GLOBE NEWSWIRE) -- Cancer Genetics, Inc.
(Nasdaq:CGIX) ("CGI" or the "Company"), a DNA-based diagnostics company
focused on developing genomic-based oncology tests and services, reported
financial results for the 2013 fiscal year and for the fourth quarter ended
December 31, 2013. Revenue for the fourth quarter was $1.9 million, an
increase of 72%, compared to 2012 fourth quarter revenue of $1.1 million. Full
year 2013 revenue was $6.6 million, an increase of 54%, compared to full-year
2012 revenue of $4.3 million. During 2013, 10,771 tests were reported to
physicians, pathologists, cancer centers and biotech and pharma customers, up
63% from 6,610 tests during 2012.
"We experienced strong revenue growth in 2013, driven in large part by the
ongoing adoption of CGI's unique tests and comprehensive approach to
disease-specific oncology testing. During Q4 we scaled up our commercial teams
in order to develop a wider footprint of clinical sales professionals, and we
expanded our pipeline into areas of high unmet need, including renal and
cervical cancers," said Panna Sharma, CGI's president and chief executive
officer. "We look forward to accelerating growth during 2014 due to our
improved sales and marketing infrastructure and our robust, targeted portfolio
of unique cancer tests for blood-borne and urogenital cancers. We are also on
track in advancing our own next-generation sequencing programs and those in
our joint-venture, Oncospire Genomics™ with Mayo Clinic."
Operating expenses for the fourth quarter of 2013 were $3.2 million, inclusive
of $0.8 million in stock based compensation expense. This compares with
operating expenses of $1.9 million during the fourth quarter of 2012,
inclusive of $0.1 million in stock based compensation. The fourth quarter
increase in operating expenses was driven by increases in headcount,
professional fees and other costs of being public. Net loss was $2.5 million
in the fourth quarter, or $0.31 per basic share and $0.37 per diluted share,
compared with a net loss of $4.0 million in the fourth quarter of 2012. The
Q4-2013 net loss included $0.3 million in interest expense. Interest expense
is expected to decrease by over 85% starting in the second quarter of 2014 as
a result of the completion of the amortization of the loan guarantee and
For the full year, operating expenses were $10.1 million, inclusive of $1.2
million in stock-based compensation expense, compared to $8.0 million in 2012,
inclusive of $0.9 million in stock-based compensation expense. The increase in
operating expenses during 2013 includes one-time costs of $0.8 million related
to the IPO. Operating losses for the full year 2013 were $8.5 million as
compared to $7.6 million during 2012. Net loss for the full year was $12.4
million, or $2.65 per basic share and $3.64 per diluted share. The loss
includes $2.4 million in interest expense.
At December 31, 2013, the company had $49.5 million of cash and cash
equivalents as a result of completing three public financings, including a
successful IPO and two follow-on offerings raising a total of approximately
$61.5 million net of offering costs.
Financial Highlights: Fourth-Quarter 2013
*Total revenue for the 4^th quarter was $1.9 million, a 72% increase from
the $1.1 million reported in the 4^th quarter of 2012.
*Test volume in the quarter was 2,736 compared with 1,673 in the 4^th
quarter of 2012, an increase of 64%.
*Gross margins were 26.5%, compared with 2.5% in the 4^th quarter of 2012.
*Total operating expenses were $3.2 million, compared to $1.9 million in
the 4^th quarter of 2012.
*Net loss for the quarter was $2.5 million, or $0.37 per share (fully
diluted), compared to a net loss of $4.0 million, or $3.86 per share
(fully diluted) in the 4^th quarter of 2012.
Financial Highlights: Fiscal Year 2013
*Total revenue for 2013 was $6.6 million an increase of 54% from the $4.3
million reported in 2012, driven primarily by increases in test volume.
*Test volume increased by 63% to 10,771 for the year ended December 31,
2013, up from 6,610 for the same period in 2012.
*Average revenue (excluding grant revenue and probe revenue) per test
increased to $566 per test for 2013, up from $553 per test in 2012.
*Gross profit for the year was $1.7 million, compared with $0.4 million in
the prior year. Gross margins were 25.5%, compared with 8.7% in 2012.
*Total operating expenses for 2013 were $10.1 million, compared to $8.0
million for the same full-year period of 2012.
*Loss from operations for the 2013 fiscal year was $8.5 million, compared
to a loss from operations of $7.6 million for 2012.
*Net loss for 2013 was $12.4 million, compared to a net loss of $6.7
million for 2012.
*Cash and cash equivalents were approximately $49.5 million as of December
31, 2013, providing CGI with liquidity to fund future research and
development programs and company operations.
Recent Business Highlights
*In October 2013, CGI completed a public follow on share offering, selling
3,286,700 shares of common stock at a public offering price of $14.00 per
share, resulting in gross proceeds of $46.0 million ($42.3 million net
*In November, following CLIA approval, CGI launched its proprietary
genomic-based diagnostic for cervical cancer, FHACT™ in the U.S.
*In January, CGI signed an agreement with health insurer Three Rivers
Provider Network, Inc., to provide cancer diagnostic services to more than
15 million domestic plan members.
*FHACT™, CGI's cervical cancer test was adopted by Kamineni Hospital Group
in India on International Women's Day culminating a nine month validation
to establish the validity and clinical value of the test.
*The Mayo Clinic hosted an event to highlight progress at Oncospire
Genomics™, a joint venture with CGI to develop genetic tests leveraging
next generation sequencing (NGS). The JV is initially pursuing the
development of NGS panels for lung cancer, multiple myeloma, and
*New data on CGI's novel, patent protected kidney diagnostic array, from a
6 month study that was conducted in collaboration with Memorial Sloan
Kettering, were presented at the Molecular Pathology (AMP) Annual
Conference in November.
*Genomic data and findings on CGI's novel diagnostic and prognostic test
for diffuse, large B-Cell lymphoma (DLBCL) were presented at the American
Society of Hematology (ASH) meeting in December.
*In March, new data further validating CGI's UroGenRA™-Kidney diagnostic
test for renal cell cancer were presented at the annual United States &
Canadian Academy of Pathology (USCAP) in San Diego, CA. These new data
were generated as part of a collaborative study conducted with the
Cleveland Clinic and demonstrated 93% diagnostic accuracy of the test.
*Christopher Mitton was appointed as Director of National Account
Development and Sales Operations in December.
*In January, biotechnology industry veteran John Pappajohn was appointed to
serve as the Chairman of the Board, a position previously held by Dr.Raju
S.K. Chaganti, effective January6, 2014.
*Dr. Paul Rothman, Dean of the Medical Faculty and CEO of Johns Hopkins
Medicine, was appointed to CGI's Board of Directors, also in January.
*In March, Edward J. Sitar was appointed as Chief Financial Officer,
effective April 1 2014. Mr. Sitar previously served in senior financial
roles across multiple healthcare sectors and has extensive expertise in
navigating the highly technical insurance and reimbursement landscape.
Conference Call and Webcast Details
As previously announced, CGI will hold a conference call on Wednesday, March
26, 2014, to discuss its results for 2013.
Time: 4:30 p.m. Eastern Time
Dial in (domestic) (877) 407-4018
Dial in (international) (201) 689-8471
Conference ID: 13579135
To participate in the call, please dial in approximately 10 minutes prior to
the scheduled start time. Interested parties can also listen via a live
Internet webcast, which can be found via the Company's website at
A replay of the call will be available for two weeks from March 26, 2014,
until April 9, 2014. In addition, a recording of the call will be available
via the Company's website at http://www.cancergenetics.com.
Replay (domestic) (877)-870-5176
Replay (international) (858) 384-5517
Conference ID: 13579135
About Cancer Genetics:
Cancer Genetics, Inc. is an emerging leader in DNA-based cancer diagnostics,
servicing some of the most prestigious medical institutions in the world. Our
tests target cancers that are difficult to diagnose and predict treatment
outcomes. These cancers include hematological, urogenital and HPV-associated
cancers. We also offer a comprehensive range of non-proprietary
oncology-focused tests and laboratory services that provide critical genomic
information to healthcare professionals, as well as biopharma and biotech
companies. Our state-of-the-art reference lab is focused entirely on
maintaining clinical excellence and is both CLIA certified and CAP accredited
and has licensure from several states including New York State. We have
established strong research collaborations with major cancer centers such as
Memorial Sloan-Kettering, The Cleveland Clinic, Mayo Clinic and the National
Cancer Institute. For further information, please seewww.cancergenetics.com.
This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. All statements
pertaining to future financial and/or operating results, future growth in
research, technology, clinical development and potential opportunities for
Cancer Genetics, Inc. products and services, along with other statements about
the future expectations, beliefs, goals, plans, or prospects expressed by
management constitute forward-looking statements. Any statements that are not
historical fact (including, but not limited to, statements that contain words
such as "will," "believes," "plans," "anticipates," "expects," "estimates")
should also be considered to be forward-looking statements. Forward-looking
statements involve risks and uncertainties, including, without limitation,
risks inherent in the development and/or commercialization of potential
products, uncertainty in the results of clinical trials or regulatory
approvals, need and ability to obtain future capital, maintenance of
intellectual property rights and other risks discussed in the Company's Form
10-Q for the quarter ended September 30, 2013 and other filings with the
Securities and Exchange Commission. These forward-looking statements speak
only as of the date hereof. Cancer Genetics disclaims any obligation to update
these forward-looking statements.
CANCER GENETICS, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets
Cash and cash equivalents $49,459,564 $819,906
Accounts receivable, net of allowance for doubtful 1,567,039 850,545
accounts of 2013 $36,000; 2012 $36,000
Other current assets 864,616 489,278
Total current assets 51,891,219 2,159,729
FIXED ASSETS, net of accumulated depreciation 1,264,624 964,923
Security deposits 1,564 1,564
Restricted cash 300,000 250,000
Loan guarantee and financing fees, net of accumulated 310,500 1,907,502
amortization of 2013 $517,500; 2012 $929,498
Patents 401,709 324,764
Investment in joint venture 987,657 —
Deferred offering costs — 3,343,289
Total Assets $55,157,273 $8,951,771
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Accounts payable and accrued expenses $2,346,240 $4,578,761
Obligations under capital leases, current portion 51,400 17,158
Deferred revenue 199,560 468,010
Notes payable, current portion 22,298 3,836,567
Line of credit — 2,871,200
Total current liabilities 2,619,498 11,771,696
Obligations under capital leases 309,777 7,490
Deferred rent payable 170,789 164,298
Notes payable, long-term — 2,440,683
Line of credit 6,000,000 6,000,000
Warrant liability 594,000 12,549,000
Total liabilities 9,694,064 32,933,167
STOCKHOLDERS' EQUITY (DEFICIT)
Convertible Preferred Stock — 241
Common stock, additional paid-in capital, treasury 45,463,209 (23,981,637)
stock and accumulated equity (deficit)
Total Stockholders' Equity (Deficit) 45,463,209 (23,981,396)
Total Liabilities and Stockholders' Equity (Deficit) $55,157,273 $8,951,771
Cancer Genetics, Inc. and Subsidiary
Consolidated Statements of Operations
2013 2012 2013 2012
Unaudited Unaudited Unaudited
Revenue $1,854,495 $1,075,732 $6,609,957 $4,301,563
Cost of revenues 1,363,948 1,048,751 4,924,626 3,928,993
Gross profit 490,547 26,981 1,685,331 372,570
Research and 806,082 560,275 2,190,204 2,111,947
Sales and marketing 567,055 348,790 1,841,675 1,398,786
General and 1,855,860 1,027,123 6,115,035 4,502,424
Total operating 3,228,997 1,936,188 10,146,914 8,013,157
Loss from (2,738,450) (1,909,207) (8,461,583) (7,640,587)
Interest expense (347,987) (1,441,018) (2,387,733) (4,701,028)
Interest income 25,048 — 29,693 —
Debt conversion — (1,862,012) (6,849,830) (1,862,012)
Change in fair
value of warrant 537,000 1,168,000 4,633,000 7,538,000
Total other 214,061 (2,135,030) (4,574,870) 974,960
Loss before income (2,524,389) (4,044,237) (13,036,453) (6,665,627)
Income tax — — (663,900) —
Net loss $(2,524,389) $(4,044,237) $(12,372,553) $(6,665,627)
Basic net loss per $(0.31) $(3.00) $(2.65) $(4.97)
Diluted net loss $(0.37) $(3.86) $(3.64) $(10.55)
Average Shares 8,270,074 1,347,437 4,665,316 1,342,174
Average Shares 8,298,014 1,349,999 4,675,974 1,346,161
CONTACT: Investor Relations
Life Science Advisors LLC
RedChip Companies, Inc.
Paul Kuntz, 800-733-2447, ext. 105
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