Rosetta Genomics Reports 2013 Financial Results

Rosetta Genomics Reports 2013 Financial Results 
Demand for microRNA Oncology Testing Services Continues to Grow as
Company Advances a Broad Pipeline of microRNA-Based Diagnostic Assays
and Therapeutic Products; Business Update Conference Call to Be Held
April 1st at 10:00 a.m. Eastern Time 
PRINCETON, NJ and REHOVOT, ISRAEL -- (Marketwired) -- 03/31/14 -- 
Rosetta Genomics Ltd. (NASDAQ: ROSG), a leading developer and
provider of microRNA-based molecular diagnostics and therapeutics,
today reported financial results for the year ended December 31,
2013. 
Highlights for the second half of 2013 and recent weeks include: 


 
--  Continued to enhance awareness of and demand for the Rosetta Cancer
    Origin Test(TM), which resulted in a 100% increase in revenues
    compared with 2012;
--  Recorded gross billings for 2013 of $1.1 million, which more than
    doubled from $490,000 in 2012, with commercial initiatives continuing
    to gain significant traction as evidenced by gross billings of nearly
    $600,000 in the first quarter of 2014;
--  Executed credentialing agreements for the Rosetta Cancer Origin Test
    with four U.S. national healthcare network providers as well as a
    managed care contract with a large Blue Cross/Blue Shield affiliate,
    increasing coverage for this test to approximately 170 million
    Americans;
--  Received three important U.S. patents that cover the Company's
    microRNA-based technology as a diagnostic for pre-eclampsia, as a
    treatment for liver cancer and as a therapeutic for non-small cell
    lung cancer (NSCLC) in p53-negative patients;
--  Announced a master service provider agreement with an undisclosed
    major global biopharmaceutical company under which Rosetta will
    provide its microRNA profiling and other services in important areas
    of unmet medical need;
--  Closed 2013 with cash and equivalents and short term bank deposits of
    $24.5 million to support commercial expansion and product development.

  
Management Commentary 
"Throughout 2013 we made considerable progress in all three areas
critical to long-term revenue generation including current product
sales, new product development and third-party collaborations. On the
commercial front we made inroads enhancing awareness and driving
demand for the Rosetta Cancer Origin Test and expanded coverage
through Medicare and private healthcare network providers," said
Kenneth A. Berlin, President and Chief Executive Officer of Rosetta
Genomics.  
"Investments in our commercial infrastructure are yielding results as
evidenced by the significant increase in product revenues and
billings in 2013. Moreover, we have seen continued growth in product
demand for the Rosetta Cancer Origin Test, with first quarter 2014
billings of nearly $600,000 maintaining the momentum we saw in the
fourth quarter of 2013. We look forward to further increases in
billings and product revenues as we continue to expand reimbursement
coverage to additional commercial carriers.  
"The recently announced reinvigoration of our Research and
Development efforts is already producing results as we now expect to
launch at least one new diagnostic assay per year beginning in 2015.
We have a number of promising product candidates under development
including our assay for indeterminate thyroid fine need aspirate,
which is scheduled to launch next year, as well as assays for chronic
kidney rejection, heart failure, Alzheimer's disease and a
therapeutic for cytomegalovirus (CMV) infection. We look forward to
reporting our progress with these initiatives over the coming months. 
"We were especially pleased to execute a master service agreement
with an undisclosed global biopharmaceutical company for our microRNA
profiling services, and expect to collaborate on the utilization of a
novel therapeutic approach in important areas of unmet medical need.
In addition, we continue to have high-level discussions with a number
of potential collaborators that could allow us to leverage our
leading microRNA biomarker platform in both diagnostic and
therapeutic applications. We anticipate executing agreements with
pharmaceutical and biotech companies to assist their therapeutic
efforts.  
"In support of both our commercial and our development efforts, we
were pleased to publish several important articles in peer-reviewed
journals and to have clinically-validated data presented at several
key medical conferences. In tandem, we remained focused on fortifying
our leading patent position in microRNA technology as this 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 our
intellectual property," concluded Mr. Berlin. 
Financial Results for the Year Ended December 31, 2013 


 
--  For the year ended December 31, 2013, the Company recorded revenues
    from continuing operations of $405,000, more than double the $201,000
    of revenues recorded for the year ended December 31, 2012.
--  Cost of revenues increased to $709,000 for 2013, up from $258,000 for
    2012 primarily due to higher volume of processed samples as well as
    increases in personnel and infrastructure to meet current and
    anticipated sample volume.
--  Research and development expenses for 2013 increased to $1.7 million
    from $1.2 million for 2012 primarily due to an increase in headcount
    and lab materials to create and advance our expanded pipeline of
    R&D projects.
--  Marketing and business development expenses for 2013 increased to $7.0
    million from $4.0 million for 2012, primarily due to the Company's
    ongoing investment in its U.S. commercialization efforts, as well as
    to increases in business development initiatives to procure
    collaborative and/or licensing agreements.
--  General and administrative expenses in 2013 were $4.3 million compared
    with $3.0 million in 2012, with the increase primarily due to higher
    overhead as the Company added key executives and other personnel.
--  The operating loss for 2013 was $13.3 million, including $847,000 of
    non-cash stock-compensation expense. This compares with an operating
    loss for 2012 of $8.3 million, including $549,000 of non-cash
    stock-compensation expense.
--  The Company's net loss after discontinued operations for 2013 was
    $12.9 million or $1.34 per ordinary share on 9.6 million shares
    outstanding, compared with a net loss after discontinued operations
    for 2012 of $10.5 million or $2.35 per ordinary share on 4.4 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 2013 was
    $12.1 million or $1.26 per ordinary share, compared with a net loss
    for 2012 of $7.7 million or $1.74 per ordinary share.
--  Details reconciling non-GAAP amounts with GAAP amounts are provided
    below.

  
Balance Sheet Highlights 
As of December 31, 2013, Rosetta Genomics had $24.5 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 $12 million in cash to fund operations in 2013. The
2013 cash position included net proceeds of $4.8 million from the
sale of 1.3 million ordinary shares through the p
reviously 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.  
Cash Guidance 
The Company plans to continue to invest in the expansion of its U.S.
commercial operations and will fund further clinical development of
its microRNA technology. As a result, the Company estimates that net
cash requirements to fund operations in 2014 will be in the range of
$14 million to $15 million. Rosetta Genomics believes that its cash
balance of $24.5 million as of December 31, 2013, combined with
projected revenue growth, will be sufficient to fund operations until
late 2015. 
Conference Call  
Rosetta Genomics management will host a conference call on April 1,
2014 at 10:00 a.m. Eastern time to discuss these financial results
and recent corporate developments, and to 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 19429704. 
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 19429704. The replay will be available through April 8, 2014. 
A live audio webcast of the call will also be available in the
"Investors" section of the Company's website at
www.rosettagenomics.com/investors. 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 
 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. 
About Rosetta Genomics
 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 and therapeutics. Rosetta currently commercializes a full range
of microRNA-based molecular diagnostics. 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. For more
information, please visit www.rosettagenomics.com. 
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 gross billings, 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 plans to launch
one new product per year beginning in 2015, that significant
increases in billings will translate to product revenue, that
discussions with potential collaborators could allow Rosetta to
leverage its leading microRNA biomarker platform in both diagnostic
and therapeutic applications and that Rosetta's cash balance of $24.5
million as of December 31, 2013, combined with projected revenue
growth, will be sufficient to fund operations into 2015, 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. 
-Tables to Follow-  


 
                                                                            
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS                               
--------------------------------------------------------------------------- 
U.S. dollars in thousands                                                   
                                      December 31, 2013   December 31, 2012 
                                     ------------------  ------------------ 
                                                                            
ASSETS                                                                      
CURRENT ASSETS:                                                             
Cash and cash equivalents            $           16,774  $           30,798 
Restricted cash                                      24                  34 
Short-term bank deposits                          7,667                 130 
Trade receivables                                   224                  88 
Other accounts receivable and             
                                  
 prepaid expenses                                   309                 568 
Discontinued operation, current                                             
 assets                                               -                 135 
                                     ------------------  ------------------ 
Total current assets                             24,998              31,753 
LONG-TERM ASSETS:                                                           
Long-term receivables                                 8                   7 
Property and equipment, net                         874                 546 
Discontinued operation, non-current                                         
 assets                                               -                 224 
                                     ------------------  ------------------ 
Total long-term assets                              882                 777 
                                     ------------------  ------------------ 
Total assets                         $           25,880  $           32,530 
                                     ==================  ================== 
LIABILITIES AND SHAREHOLDERS EQUITY                                         
CURRENT LIABILITIES:                                                        
Trade payables                       $              906  $              754 
Other accounts payable and accruals               1,032                 512 
                                     ------------------  ------------------ 
Total current liabilities                         1,938               1,266 
LONG-TERM LIABILITIES:                                                      
Warrants related to share purchase                                          
 agreements                                          81                 136 
Deferred revenue                                    228                 228 
                                     ------------------  ------------------ 
Total long-term liabilities                         309                 364 
                                                                            
SHAREHOLDERS' EQUITY (DEFICIENCY):                                          
Ordinary Shares of NIS 0.6 par                                              
 value: 40,000,000 and 20,000,000                                           
 shares authorized at December 31,                                          
 2013 and 2012, respectively;                                               
 10,473,488 and 9,099,805 shares                                            
 issued at December 31, 2013 and                                            
 2012, respectively; 10,470,230 and                                         
 9,096,547 shares outstanding at                                            
 December 31, 2013 and 2012,                                                
 respectively                                     1,609               1,379 
Additional paid-in capital                      130,423             125,023 
Accumulated deficit                            (108,399)            (95,502)
                                     ------------------  ------------------ 
Total shareholders' equity                       23,633              30,900 
                                     ------------------  ------------------ 
Total liabilities and shareholders'                                         
 equity                              $           25,880  $           32,530 
                                     ------------------  ------------------ 
                                                                            
                                                                            
                                                                            
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF LOSS                           
--------------------------------------------------------------------------- 
U.S. dollars in thousands (except share and per share data)                 
                                                                            
                                            For the year ended December 31, 
                                                 2013             2012      
                                           ---------------  --------------- 
Revenues                                   $           405  $           201 
Cost of revenues                                       709              258 
                                           ---------------  --------------- 
Gross loss                                             304               57 
Operating expenses:                                                         
Research and development, net                        1,744            1,247 
Marketing and business development                   7,002            3,938 
General and administrative                           4,297            3,025 
                                           ---------------  --------------- 
Total operating expenses                            13,043            8,210 
                                           ---------------  --------------- 
Operating loss                                      13,347            8,267 
                                           ---------------  --------------- 
Financial expense (income), net                       (177)           2,429 
Loss from continuing operations                     13,170           10,696 
                                           ---------------  --------------- 
Other comprehensive income attributed to                                    
 marketable securities                                   -                - 
Net comprehensive (income) loss from                                        
 discontinued operations                              (273)            (239)
                                           ---------------  --------------- 
Net comprehensive loss after discontinued                                   
 operations                                         12,897           10,457 
                                           ---------------  --------------- 
Basic and diluted net loss per Ordinary                                     
 Share from continuing operations                     1.37             2.40 
Basic and diluted net loss (income) per                                     
 Ordinary Share from discontinuing                                          
 operations                                          (0.03)           (0.05)
Basic and diluted net loss per Ordinary                                     
 Share                                                1.34             2.35 
                                           ---------------  --------------- 
Weighted average number of Ordinary Shares                                  
 used to compute basic and diluted net                                      
 loss per Ordinary Share                         9,593,952        4,448,449 
                                                                            
                                                                            
                                                                            
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENT OF OPERATION:     
----------------------------------------------------------------------------
U.S. dollars in thousands in thousands (except share and per share data)    
                                                                            
                                                        Year ended          
                                                       December 31,         
USD in thousands                                   2013            2012     
                                              --------------  --------------
Net comprehensive loss after discontinued                                   
 operations                                 
  $       12,897  $       10,457
Stock-based compensation relating to options,                               
 RSUs, shares and warrants granted to                                       
 employees, non-employees and directors                  893             549
Revaluation of warrants related to share                                    
 purchase agreement                                      (55)            635
Amortization of discount and change in fair                                 
 value of embedded conversion feature in the                                
 convertible debenture                                     -           1,547
                                              --------------  --------------
non-GAAP net loss                             $       12,059  $        7,726
                                              ==============  ==============
                                                                            
                                                         Year ended         
                                                        December 31,        
Basic and diluted per share data                    2013            2012    
                                              --------------  --------------
Net loss after discontinued operations        $         1.34  $         2.35
Stock-based compensation                                0.09            0.12
Revaluation of warrants related to share                                    
 purchase agreement                                    (0.01)           0.14
Embedded conversion feature in the                                          
 convertible debenture                                     -            0.35
                                              --------------  --------------
non-GAAP net loss                             $         1.26  $         1.74
                                              ==============  ==============
                                                                            
Weighted average number of Ordinary shares                                  
 used to compute basic net loss per Ordinary                                
 share                                             9,593,952       4,448,449
                                                                            
                                                                            
                                                                            
                                                 Year ended December 31,    
                                                   2013            2012     
                                             --------------- ---------------
Gross billings                                     1,091,288         490,075
Unrecognized billings                                685,965         288,864
Revenues                                             405,323         201,211
                                                                            
                                                                            
                                              Quarter ended                 
                                              March 31, 2014                
                                             ---------------                
Estimated gross billings                             580,000                
Unrecognized billings                                320,000                
Estimated revenues                                   260,000                

  
Company Contact: 
Rosetta Genomics 
Ken Berlin
President & CEO 
(609) 419-9003 
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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