LOS ANGELES, Nov. 14 /PRNewswire-FirstCall/ -- Response Genetics, Inc. (Nasdaq: RGDX) a company focused on the development of molecular diagnostic tests for cancer, today announced its consolidated financial results for the third quarter of 2007, and nine months ended September 30, 2007.
"The third quarter of 2007 brought new interest in Response Genetics from the physician and investment communities," said Kathleen Danenberg, President and CEO of Response Genetics. "The combination of the recent announcement of our plans to make the ERCC-1 gene expression test available in the first quarter of 2008, and the positive Journal of Clinical Oncology article in July related to the test was met with great enthusiasm from physicians, potential partners and investors. We understand the value our ERCC-1 test provides to physicians seeking to personalize disease management and improve patient outcomes, and we are excited to share it with selected institutions and clinical practice groups early next year. We look forward to providing you with further updates as events materialize."
Financial Results for Three Months Ended September 30, 2007
Total revenue increased 24% to $2.2 million in the third quarter of 2007, compared to $1.8 million in the third quarter of 2006. This increase was generated by the Company's existing pharmaceutical contracts related to pharmacogenomic testing services, and the introduction of new testing services being offered by Response Genetics to its pharmaceutical clients.
Cost of revenue for the third quarter of 2007 was $910,090, compared with $643,772 for the third quarter of 2006. Research and development expenses were $651,536 for the third quarter of 2007, compared with $267,095 for the same period in the prior year. General and administrative expenses of $1.8 million for the third quarter of 2007 increased from $656,997 for the third quarter of the prior year. Total operating expenses for the third quarter of 2007 increased to $3.3 million, compared with $1.6 million for the same period last year. The increases in operating expenses were primarily due to 1) non-cash, stock-based compensation to employees and new personnel to support the Company's growth totaled approximately $582,000, 2) operating costs related to the continuing operation of the European laboratory totaled approximately $460,000, 3) costs involving the new testing services the Company is offering, maintaining the Company's intellectual property portfolio, costs related to the completion of the Company's IPO, and costs associated with being a public company totaled approximately $729,000.
Response Genetics' net loss for the third quarter of 2007 of $898,986 or $0.09 per share, compared with a net profit of $32,382, or $0.01 per share, for the third quarter of 2006.
Financial Results for Nine Months Ended September 30, 2007
Revenues for the first nine months of 2007 increased 40% to $5.4 million, compared with $3.8 million for the first nine months of 2006. Cost of revenue for the first nine months of 2007 was $2.9 million, compared with $1.6 million reported for the first nine months of 2006. General and administrative expenses for the first nine months of the year were $5.0 million, compared to $2.2 million for the comparable period in 2006. Research and development expenses in the first nine months of 2007 totaled $1.9 million, compared to $862,797 for the comparable period in 2006. Total operating expenses for the first nine months of 2007 were $9.8 million, versus $4.7 million for the comparable period in 2006. Response Genetics reported a net loss for the nine months ended September 30, 2007 of $4.6 million, or $0.78 per share, versus a net loss for the comparable period in 2006 of $1.4, or $0.50 per share.
Cash and Cash Equivalents
Cash and cash equivalents at September 30, 2007 were $17.9 million compared to $3.0 million at September 30, 2006.
Clinical Development Highlights
Response Genetics To Make ERCC-1 Molecular Diagnostic Test Available in Q1 2008
On November 1, Response Genetics announced that it plans to make its test for Excision-Repair Cross-Complementing 1 (ERCC-1) gene expression for platin-based chemotherapy resistance available to selected institutions and clinical practice groups in the first quarter of 2008. The test will be offered only through Response Genetics' CLIA-certified laboratory in California. The initial launch will provide additional information about the clinical utility of ERCC-1 in the treatment of Non-Small Cell Lung Cancer (NSCLC); clinical practice activities such as sample acquisition, logistics, patient and physician communication; and the use of the test in normal clinical practice related to NSCLC. The Company plans to provide the appropriate financial resources to ensure that the initial market introduction is a success.
Previously, the Company announced the publication of promising results from a prospective study published in the July 1 issue of the Journal of Clinical Oncology. The data indicated that high expression of ERCC-1 in patients with advanced NSCLC predicts resistance to platin-based chemotherapy. These findings suggest that the measurement of ERCC-1 levels would play a role in individualizing treatment therapies for certain lung cancer patients. The multi-center, randomized study was designed to determine the overall response rate (complete plus partial responses) of patients with stage IIIb or IV NSCLC to cisplatin-based therapy by determining levels of the biomarker ERCC-1 mRNA in a paraffin-embedded tissue biopsy before administering treatment. The Company believes that this is the first prospective study using a biomarker to predict chemotherapy response in lung cancer.
Response Genetics, Inc. will continue research efforts in other cancers where platin-based chemotherapy is used, including colon, ovarian, gastric and esophageal and plans to expand offering of the ERCC-1 molecular diagnostic test to additional institutions and additional cancers as clinical results become available.
About Response Genetics, Inc.
Response Genetics, Inc. ("RGI") is engaged in the research and development of pharmacogenomic cancer diagnostic tests based on its proprietary and patented technologies. RGI's technologies enable extraction and analysis of genetic information from genes derived from tumor samples stored as formalin-fixed and paraffin embedded specimens. RGI currently generates revenue primarily from the sales of its proprietary analytical pharmacogenomic testing services of clinical trial specimens to the pharmaceutical industry. The company was founded in 1999 and its principal headquarters are located in Los Angeles, California. For more information, please visit http://www.responsegenetics.com.
Forward Looking Statement Notice
Except for the historical information contained herein, this press release and the statements of representatives of Response Genetics, Inc. (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 analyze cancer samples, 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, the ability of the Company to make its ERCC-1 molecular diagnostic test available in the first quarter of 2008, or at all, and other statements identified by words such as "projects," "may," "could," "would," "should," "believes," "expects," "anticipates," "estimates," "intends," "plans" 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 and 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.
RESPONSE GENETICS, INC.
CONSOLIDATED BALANCE SHEETS
As of As of
December 31, September 30,
Cash and cash equivalents $ 4,930,123 $ 17,868,827
Accounts receivable 1,288,255 1,720,240
and other current assets 837,238 442,469
Total current assets 7,055,616 20,031,536
Property and equipment, net 1,184,963 2,545,733
Other assets 19,102 19,102
Total assets $ 8,259,681 $ 22,596,371
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Accounts payable $ 404,008 $ 581,749
Accrued expenses 547,119 429,627
Accrued royalties 123,852 146,016
Accrued payroll, bonus
and related liabilities 595,276 195,791
Deferred revenue 1,628,325 3,910,301
Total current liabilities 3,298,580 5,263,484
Notes payable to stockholders 716,854 --
Accrued interest on notes
payable to stockholders 329,036 --
Accrued dividends 6,097,579 --
net of current portion 3,320,000 1,603,186
Total liabilities 13,762,049 6,866,670
Commitments and contingencies
Stockholders' (deficit) equity
Series B Convertible Preferred Stock,
$0.01 par value; 1,038,048 and 0 issued
and outstanding (liquidation preference
of $9 per share, or $9,342,432 plus
accrued but unpaid dividends) at
December 31, 2006 and September 30, 2007,
respectively 10,380 --
Series A Junior Convertible Preferred Stock,
$0.01 par value; 500,000 and 0 issued and
outstanding (liquidation preference of $5
per share, or $2,500,000) at December 31,
2006 and September 30, 2007, respectively 5,000 --
Common stock, $0.01 par value; 20,000,000
and 50,000,000 shares authorized; 2,726,320
and 10,239,276 shares issued and outstanding
at December 31, 2006 and September 30, 2007,
respectively 27,263 102,393
Additional paid-in capital 9,722,273 35,048,513
Accumulated deficit (15,267,284) (19,408,635)
Accumulated other comprehensive loss -- (12,570)
Total stockholders' (deficit) equity (5,502,368) 15,729,701
Total liabilities and stockholders'
(deficit) equity $ 8,259,681 $ 22,596,371
RESPONSE GENETICS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Nine Months
Ended September 30, Ended September 30,
2006 2007 2006 2007
Revenue $1,810,800 $2,239,653 $3,817,925 $5,355,031
Cost of revenue 643,772 910,090 1,621,902 2,916,242
administrative 656,997 1,777,617 2,234,382 4,965,499
development 267,095 651,536 862,797 1,888,751
expenses 1,567,864 3,339,242 4,719,081 9,770,491
(loss) 242,936 (1,099,589) (901,156) (4,415,460)
Other income (expense):
Interest expense (14,069) (98) (43,947) (26,854)
Interest income 37,076 216,933 112,294 325,264
Other - - 179,000 -
Income (loss) before
income taxes 265,943 (882,754) (653,809) (4,117,050)
income taxes - 16,232 800 24,301
Net income (loss) 265,943 (898,986) (654,609) (4,141,351)
dividends (233,561) - (700,684) (412,625)
Net income (loss)
common stockholders $32,382 $(898,986) $(1,355,293) $(4,553,976)
Net income (loss)
per share - basic $0.01 $(0.09) $(0.50) $(0.78)
Net income (loss)
per share - diluted $0.01 $(0.09) $(0.50) $(0.78)
shares - basic 2,726,320 10,239,276 2,726,320 5,875,132
shares - diluted 2,726,320 10,239,276 2,726,320 5,875,132
|SOURCE Response Genetics, Inc.|
Copyright©2007 PR Newswire.
All rights reserved