Key Milestone Achieved With First Diagnostic Test Based on Company's microRNA Technology, Developed by Columbia University Medical Center,
Approved for Clinical use
Acquires CLIA-certified lab to Expedite Commercialization of its
microRNA-based Tests Expands Pipeline With Three Additional microRNA-based Cancer Tests in
REHOVOT, Israel and JERSEY CITY, New Jersey, August 19 /PRNewswire-FirstCall/ -- Rosetta Genomics, Ltd. (NASDAQ: ROSG), a leading developer of microRNA-based diagnostic and therapeutic products, reported today its consolidated financial results for the quarter ended June 30, 2008 and business highlights.
The company reported a 2008 second-quarter net loss of $3.7 million, or $0.31 per ordinary share. The second-quarter result compares with a net loss of $2.3 million, or $0.19 per ordinary share, for the corresponding quarter of 2007. Net loss for the six months ended June 30, 2008 was $7.6 million, or $0.63 per ordinary share, compared with a net loss of $4.3 million, or $0.41 per ordinary share, for the corresponding period of 2007.
"This has been a very exciting, and eventful quarter for us with the
approval of the first test based on our microRNA technology and the
acquisition of a CLIA-certified lab, both of which represent key milestones
on our path to become a fully commercial company," said Amir Avniel,
President and CEO of Rosetta Genomics. "The approval of the first test acts
as strong validation to microRNA's ability to be utilized as powerful
biomarkers, and we expect two additional tests - for differentiating
mesothelioma from adenocarcinomas in the lung, and identifying the poping products for similar uses; Rosetta's
dependence on collaborators; the ability to obtain coverage and payment
from health plans and payers for diagnostic and therapeutic products
applying Rosetta's technology and Rosetta's short operating history; as
well as those risks more fully discussed under "Key Information - Risk
Factors" in Rosetta's Annual Report on Form 20-F for the year ended
December 31, 2007 on file with the Securities and Exchange Commission. In
addition, any forward-looking statements represent Rosetta's views only as
of today 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.
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
Six months Three months
ended June 30, ended June 30,
2008 2007 2008 2007
Research and development, net $ 4,571 $ 2,864 $ 2,182 $ 1,703
Marketing and business
development.... 945 787 434 412
administrative............ 1,725 1,275 896 595
loss....................... 7,241 4,926 3,512 2,710
net........... 334 (655) 185 (455)
loss......................... $ 7,575 $ 4,271 $ 3,697 $ 2,255
Basic and diluted net loss per
Ordinary share . $ 0.63 $ 0.41 $ 0.31 $ 0.19
Weighted average number of
Ordinary shares used to
compute basic and diluted
net loss per
Ordinary share $ 11,929,689 10,374,298 11,939,107 11,857,447
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)
June 30, December 31,
Cash and cash
equivalents.............................. $ 12,090 $ 13,590
deposits................................ 114 112
securities................................. 2,745 8,251
Other accounts receivable and prepaid
expenses.............. 311 297
assets................................. 15,260 22,250
INVESTMENTS.............................. 1,760 2,391
FUND................................. 195 144
PROPERTY AND EQUIPMENT,
NET......................... 1,311 1,253
ASSETS...................................... 115 -
....................................... $ 18,641 $ 26,038
LIABILITIES AND SHAREHOLDERS' EQUITY
Current maturities of capital lease and of
long-term loan....... $ 112 $ 247
payables.................................... 506 516
Other accounts payable and
accruals...................... 915 1,102
liabilities.............................. 1,533 1,865
Long-term bank loan and capital
lease..................... 39 16
revenue..................................... 228 228
pay................................. 381 324
Liabilities........................... 648 568
commitments and contingent liabilities
capital:...................................... 27 27
capital............................... 59,503 58,984
income............................ (3) 86
compensation....................... - -
Deficit accumulated during the development
stage............ (43,067) (35,492)
equity........................... 16,460 23,605
Total liabilities and shareholders'
equity............... $ 18,641 $ 26,038
(1) American Cancer Society website, 2008 (2) Travis WD, Colby TV, Corrin B, et al.: Histological typing of lung
and pleural tumours. 3rd ed. Berlin: Springer-Verlag, 1999.
Joshua Gordon, M.D.
Operating loss for the second quarter of 2008 was $3.5 million (including a non-cash expense of $295,000 related to stock-based compensation), compared with an operating loss of $2.7 million (including a non-cash expense of $282,000 related to stock-based compensation) for the corresponding quarter of 2007. Net loss for the second quarter of 2008 was $3.7 million, or $0.31 per ordinary share, compared with a net loss of $2.3 million, or $0.19 per ordinary share, for the corresponding quarter of 2007.
Net loss for the six months ended Jun 30, 2008 was $7.6 million (including a non-cash expense of $ 486,000 related to stock-based compensation), or $0.63 per ordinary share, compared with a net loss of $4.3 million (including a non-cash expense of $487,000 related to stock-based compensation), or $0.41 per ordinary share, for the corresponding period of 2007.
Research and development expenses of $2.2 million for the second quarter of 2008 and of $4.6 for the six months ended June 30, 2008, compared to $1.7 million and $2.9 for the corresponding periods of 2007, respectively, remain the company's largest expense and accounted for 62% of its operating loss in the second quarter of 2008.
As of June 30, 2008, we had $14.9 million in cash, cash equivalents, short and long term bank deposits, and marketable securities. Our outlook of total cash usage for operating activities for the remaining six months of 2008 is approximately $6 million. In July 2008 we paid $1.9 million in cash for the purchase of Parkway Clinical Laboratories, Inc.
As previously reported, due to the continuing uncertainty in the credit market, the company continues to impair its long-term investments in auction rate securities, which as of June 30, 2008, were valued at $1.8 million.
Rosetta Genomics reports the following scientific and corporate
- "miRview"(TM) is the name chosen for upcoming tests to be
developed and offered by Rosetta Genomics.
- First test based on the company's microRNA technology,
developed and validated by Columbia University Medical Center, approved
for clinical use. The test, which differentiates squamous from non
squamous non-small cell lung cancer (NSCLC) with sensitivity of 96% and
specificity of 90%, has recently been approved by the New York State
Department of Health Clinical Laboratory Evaluation Program. This test
will be clinically available through Columbia University Medical
Center's High Complexity Molecular Pathology Laboratory.
The ability of physicians to accurately differentiate squamous from
non-squamous NSCLC is an important treatment guide. Bevacizumab, an
angiogenesis inhibitor and an important new modality of therapy for
non-squamous NSCLC, includes a black-box warning about substantially higher
rates of severe or fatal hemorrhage among patients with squamous NSCLC
histology compared with non-squamous NSCLC. In addition, several other
targeted drugs for NSCLC currently under development may require this type
of sensitive differentiation. Rosetta Genomics also plans to offer its own
test, miRview(TM) Squamous, through its CLIA-certified lab.
- Mesothelioma vs. Adenocarcinoma - Differentiating between
mesothelioma and adenocarcinoma is critical for optimal therapy, but
it is often difficult to differentiate these tumors. Currently, there
is no objective, standardized test to aid pathologists in
differentiating between the many possible tumors in the lung and
pleura. Based on a few microRNA biomarkers that were identified
applying Rosetta Genomics' technology, a test is being developed to
differentiate mesothelioma from adenocarcinoma tumors including
lung adenocarcinoma and metastases to the lung or to the pleura.
This test is expected to be filed for regulatory approval in H2 2008.
In addition, Rosetta Genomics plans to offer its own test, miRview(TM)
Meso, through its CLIA-certified lab.
- Identifying primary origin of metastases (CUP) - Rosetta
Genomics continued to advance assay development of a microRNA-based
test for cancer of unknown primary (CUP). As demonstrated in a paper
published by Rosetta Genomics and collaborators in the April issue of
Nature Biotechnology, the test is being developed to distinguish among
more than 20 possible tissues of origin, and it is expected to be
submitted for regulatory approval in H2 2008. In addition, Rosetta
Genomics plans to offer its own test, miRview(TM) Mets, through its
- Additional diagnostic tests - We have advanced three new
indications into development:
- Predicting response to treatment of ovarian cancer patients -
Platinum-based cytotoxic chemotherapy in conjunction with debulking
surgery is currently the gold standard of treatment for patients with
ovarian cancer. However, approximately 20-25% of patients do not
respond to platinum-based chemotherapy and will require additional
second-line treatment. Furthermore, research suggests that
administering platinum-based treatment to patients who subsequently do
not respond to it may actually hinder their response to the second-line
treatment as well. Rosetta Genomics has identified unique microRNA
biomarkers that may assist in identifying ovarian cancer patients
expected to be resistant to platinum-based chemotherapy.
- Predicting risk of gastric cancer recurrence - Recurrence
after curative resection for gastric cancer is high and is estimated
to occur in 80% of patients. This test is being developed to use
microRNA biomarkers to predict the risk of recurrence for
non-metastatic patients after resection of the primary tumor.
- Differentiating small from non-small cell lung cancer - An
estimated 220,000(1) patients are diagnosed with lung cancer each year
in the U.S. alone. Before a patient begins lung cancer treatment, an
experienced lung cancer pathologist must review the pathologic
material. This is critical because small cell lung cancer, which is
generally not treated surgically, can be confused on microscopic
examination with non-small cell carcinoma(2). Rosetta Genomics has
identified unique microRNA biomarkers that may be used to differentiate
small from non-small cell lung cancers.
- Biomarker Discovery - identified microRNA biomarkers in the
serum of colon cancer patients which may serve as the basis for a
future blood-based test for colon cancer.
- Completed the acquisition of Parkway Clinical Laboratories
Inc., a privately-held company owning a CLIA-certified lab located in
Bensalem, Pennsylvania. The acquisition is expected to allow Rosetta
Genomics to expedite development and validation of its microRNA-based
diagnostic tests both in the U.S. and worldwide. In addition, ownership
of the CLIA-certified lab will allow Rosetta Genomics to control the
commercialization of its diagnostics, including marketing, sales, and
The Company expects the first tests will be launched through the lab
during Q4, 2008.
Collaborations and Licensing
- Initiated a clinical validation study with The University of
Texas M. D. Anderson Cancer Center. The study will focus on Rosetta
Genomics' microRNA-based test that identifies the primary site of
cancer of unknown primary (CUP) origin. The study will include one
hundred patients who are diagnosed with CUP at M. D. Anderson, and who
meet the eligibility criteria.
- Initiated a research collaboration with The University of
Texas M. D. Anderson Cancer Center and the Kleberg Center for Molecular
Markers to develop a microRNA-based diagnostic test to predict risk of
disease recurrence in lung cancer patients who have undergone curative
- Signed a collaboration agreement with the Rabin Medical
Center in Israel to develop microRNA-based diagnostics in the fields of
oncology, gynecology, and obstetrics. The collaboration will leverage
microRNAs' significant potential as highly sensitive and specific
biomarkers, to develop a wide range of diagnostic and prognostic tests.
This is the company's first collaboration to include a focus on
diagnostics for women's health indications.
- Published results of a study conducted by Rosetta Genomics'
scientists and collaborators that describes the use of microRNAs in
accurately differentiating primary from metastatic tumors of the brain.
The results have been published online in the peer-reviewed journal
Brain Pathology. The findings demonstrate microRNAs' significant
potential to act as effective biomarkers that may be applied in a
diagnostic test designed to identify primary tumors in patients with
Conferences and Events
Rosetta Genomics presented at the following conferences and events:
- Collins Stewart Fourth Annual Growth Conference, July 2008,
- American Society of Clinical Oncology (ASCO) Annual Meeting,
June 2008, Chicago, Illinois
- AACR International Conference on Molecular Diagnostics in
Cancer Therapeutic Development. September 22-25, Philadelphia,
- Maxim Group Growth Conference, October 7th, New York.
Conference Call Information
Rosetta Genomics will host a conference call at 08:30 a.m. ET today to discuss second-quarter activities and recent corporate developments. To access the live conference call, U.S. and Canadian participants may dial 1-866-966-5335; international participants may dial +44-20-3023-4460. To access the 24-hour audio replay, U.S. and Canadian participants may dial 1-866-583-1035; international participants may dial 44-20-8196-1998. The access code for the replay is 181543#. The replay will be available until August 26, 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 approximately two hours after the event, and will be archived for 30 days thereafter.
MicroRNAs (miRNAs) are recently discovered, naturally occurring, small RNAs that act as master regulators and have the potential to form the basis for a new class of diagnostics and therapeutics. Since many diseases are caused by the abnormal activity of proteins, the ability to selectively regulate protein activity through microRNAs could provide the means to treat a wide range of human diseases. In addition, microRNAs have been shown to have different expression in various pathological conditions. As a result, these differences may provide for a novel diagnostic strategy for many diseases.
About Rosetta Genomics
Rosetta Genomics (Nasdaq: ROSG) is a leader in the field of microRNAs. Founded in 2000, the company'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 IP position and proprietary platform technologies, Rosetta Genomics is working on the application of these technologies in the development of a full range of microRNA-based diagnostic and therapeutic tools, focusing primarily on cancer and various women's health indications. The first microRNA diagnostic test applying Rosetta Genomics' technology has been approved for clinical use by the State of New York, and the company expects it will be launched by licensed clinical laboratories in the United States in 2008.
Forward-Looking Statement Disclaimer
Various statements in this release concerning Rosetta's future
expectations, plans and prospects, including without limitation, statements
relating to the role of microRNAs in human physiology and disease, the
potential of microRNAs in the development of therapeutics and diagnostic
products, the progress and timing of our diagnostic and therapeutic
programs, including the expected launch of the first diagnostic tests
applying Rosetta Genomics' technology in 2008, and Rosetta's expected cash
usage in 2008 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 risks related to: the continued uncertainty in the credit and
capital markets that may result in these markets deteriorating further or
Rosetta experiencing additional ratings downgrades on any ongoing
investments in its portfolio (including on ARS); changes in the accounting
treatment and final results for 2007 resulting from final third party
valuations of the ARS; the current lack of liquidity of the ARS having a
impact on Rosetta's liquidity, cash flow or its ability to fund its
operations; other changes in general economic and business conditions;
Rosetta's approach to discover and develop novel diagnostics products,
which is unproven and may never lead to marketable products or services;
Rosetta's ability to fund and the results of further pre-clinical and
clinical trials; Rosetta's ability to obtain, maintain and protect the
intellectual property utilized by Rosetta's products; Rosetta's ability to
enforce its patents against infringers and to defend its patent portfolio
against challenges from third parties; Rosetta's ability to obtain
additional funding to support its business activities; Rosetta's dependence
on third parties for development, manufacture, marketing, sales, and
distribution of products and services; the successful development of
diagnostic and therapeutic products applying Rosetta's technology, all of
which are in early stages of development; Rosetta's ability to obtain
regulatory clearances or approvals for products, as may be required under
applicable laws; competition from others using technology similar to
Rosetta's and others devel
|SOURCE Rosetta Genomics Ltd|
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