Launch of First Three Diagnostic Tests Based on Company's microRNA
Technology on Schedule for 2008
REHOVOT, Israel and NORTH BRUNSWICK, New Jersey, February 29
/PRNewswire-FirstCall/ -- Rosetta Genomics, Ltd. (NASDAQ: ROSG), a leading
molecular diagnostics company, today reported a narrower operating loss per
ordinary share for the fourth quarter of 2007 compared with corresponding
period of 2006, and said it remains solidly on target for the launch of the
first three diagnostic tests based on the company's proprietary microRNA
technology, this year.
2007 fourth-quarter operating loss of $3.5 million (including a
non-cash expense of $311,000 related to stock based compensation), or $0.30
per ordinary share compares with an operating loss of $2.2 million
(including a non-cash expense of $302,000 related to stock based
compensation), or $0.87 per ordinary share, for the corresponding quarter
of 2006. Operating loss for the year ended December 31, 2007, was $11
million (including a non-cash expense of $1 million related to stock based
compensation), or $0.99 per ordinary share, compared with an operating loss
of $8.1 million (including a non-cash expense of $1 million related to
stock based compensation), or $3.19 per ordinary share, for 2006.
"Rosetta Genomics had a truly remarkable year in 2007, with significant
progress, in all fronts of our business, toward meeting patients' unmet
medical needs," said Amir Avniel, President and CEO. "The rapid
advancements of our diagnostic programs throughout 2007 is expected to lead
to the first launch of diagnostic tests in 2008 based on our microRNA
technology. I expect 2008 to be a defining year for us, and I am confident
we will continue to play a leading role in revolutionizing the molecular
diagnostics field."
Mr. Avniel said the three tests will differentiate squamous from
non-squamous cell lung cancer; differentiate mesothelioma from
adenocarcinoma; and identify the origin of a tumor in cancer of unknown
primary (CUP). These tests, applying Rosetta Genomics microRNA technology,
will be validated and offered by clinical laboratories that are
state-licensed and CLIA-certified, as applicable.
The tests based on Rosetta Genomics' microRNA technology share three
common features. First, they are designed to offer clinicians standardized,
objective diagnostic information. Second, they are designed to assist
clinicians in determining the most appropriate treatment for patients.
Third, the tests are backed by a strong pharmacoeconomic rationale. "We are
constantly expanding our diagnostic pipeline, both through collaborations
as well as internally, with tests aimed to fulfill these three objectives,"
Mr. Avniel said.
Mr. Avniel noted that 2007 also saw continued progress in Rosetta
Genomics' microRNA-based therapeutics program for liver cancer, conducted
in collaboration with Isis Pharmaceuticals, with in vivo studies initiated.
Mr. Avniel added that concerning intellectual property, Rosetta
Genomics "has continued to strengthen its portfolio this year, with 2
patents issued, 2 patents allowed, and 22 applications under active
examination, as well as four new patent applications filed during Q4 of
2007."
Financial Overview
Operating loss for the fourth quarter of 2007 was $3.5 million
(including a non-cash expense of $311,000 related to stock based
compensation), compared with an operating loss of $2.2 million (including a
non-cash expense of $302,000 related to stock based compensation), for the
corresponding quarter of 2006. Operating loss for the year ended December
31, 2007 was $11 million (including a non-cash expense of $1 million
related to stock based compensation), compared with operating loss of $8.1
million (including a non-cash expense of $1 million related to stock based
compensation), for 2006.
Research and development expenses of $2.1 million for the fourth
quarter of 2007, compared to $1.3 million for the fourth quarter of 2006,
remain the Company's largest expense and accounted for 60% of its operating
losses. Research and development expenses for the year ended December 31,
2007 were $6.4 million compared to $4.8 million for 2006.
On a NON-GAAP basis, the net loss for the year ended December 31, 2007
was $8.6 million, or $0.77 per ordinary share, compares with a net loss of
$6.6 million for 2006, or $2.59 per ordinary share. On a GAAP basis, the
net loss for 2007, including a non-cash expense of $1 million related to
stock based compensation and an impairment of long-term investment of $5
million, was $14.6 million, or $1.32 per ordinary share, compared with a
net loss of $7.6 million, including a non-cash expense of $1 million
related to stock based compensation, or $2.98 per ordinary share, for 2006.
As of December 31, 2007, net allowance for devaluation of $5 million,
we had $24.3 million in cash, cash equivalents, short and long term bank
deposits and marketable securities. Our outlook of total cash usage for
2008 is approximately $14 million.
As of December 31, 2007, the Company had $7.4 million of principal
invested in Auction Rate Securities (ARS) rated AAA at the time of
purchase, and as of today all of our ARS, except for two, are still rated
AAA, and all continue to pay interest in accordance with their stated
terms. However, since these ARS have experienced multiple failed auctions
due to a lack of liquidity in the market for these securities, based on
third party indications, the Company has revalued its ARS portfolio. As a
result, it has recorded an impairment charge of $5 million on the profit
and loss statement with respect to these ARS, the devaluation of which is
considered "other than temporary."
The accounting treatment and final results for 2007 may change based
upon final third party valuations regarding these securities. If
uncertainties in the credit market continue, these markets deteriorate
further or the company experiences any ratings downgrades on its
investments in ARS, the company may incur additional impairments to its
investment in ARS. The Company believes that based on its current cash,
cash equivalents, short and long term bank deposits and marketable
securities balances at December 31, 2007 and its expected operating cash
flows, the current lack of liquidity of these securities will not have a
material impact on the Company's ability to fund its operations, unless
this current lack of liquidity persists after the third quarter of 2009.
Details reconciling non-GAAP amounts with GAAP amounts including
specified items are provided in the table attached.
Recent Highlights
Rosetta Genomics reports the following scientific and corporate
highlights:
Diagnostic Programs
- Squamous vs. Non Squamous non-small cell lung cancer (NSCLC) -
Bevacizumab (Avastin(R)[1]) in combination with carboplatin and paclitaxel,
is indicated for first line treatment of patients with unresectable,
locally advanced, recurrent or metastatic non-squamous, NSCLC cancer, and
the package labeling warns that the incidence of severe or fatal hemoptysis
was 31% in patients with squamous histology and 2.3% in patients with NSCLC
excluding predominant squamous histology. However, no objective,
standardized test for differentiating squamous from non-squamous NSCLC is
currently available commercially. A novel test to differentiate squamous
vs. non-squamous NSCLC based on a single microRNA biomarker applying the
Rosetta Genomics technology is being validated and is expected to be filed
with the New York Department of Health during H1 2008.
- Mesothelioma vs. Adenocarcinoma - Differentiating between
mesothelioma vs adenocarcinoma is critical for 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
applying the Rosetta Genomics technology, this test is being developed to
separate mesothelioma from adenocarcinoma tumors including lung
adenocarcinoma and metastases to the lung or to the pleura. This test is
expected to be filed with the New York Department of Health in H2 2008.
- Cancer of Unknown Primary (CUP) - We continued to advance assay
development of microRNA-based test for cancer of unknown primary (CUP). The
test is being developed to distinguish among more than 20 possible tissues
of origin, and it is expected to be filed with the New York Department of
Health in H2 2008.
- Additional diagnostic tests - We continued the expansion of our
microRNA-based diagnostic pipeline with cancer-related indications and
indications related to women's health.
- Identified microRNAs that are potential biomarkers for differential
diagnosis of the following in lung cancer: primary vs. metastases,
neuroendocrine tumors vs.
- non-small cell lung cancer, lung cancer vs. thymoma, and carcinoid
vs. other neuroendocrine tumors.
- Identified specific microRNAs that are markers to differentiate
between primary liver and brain tumors and metastases to these organs.
- Women's health: Identified specific microRNAs that may be potential
markers for preeclampsia in serum. Demonstrated correlation between
microRNAs in serum and physiological conditions.
Therapeutic Programs
- Liver Cancer Therapeutic - Rosetta Genomics, in collaboration with
Isis Pharmaceuticals, Inc., has entered in vivo studies on antisense
oligonucleotide leads designed to inhibit a microRNA that it has identified
as a potential drug target.
Collaborations and Licensing
- Initiated a collaboration with Columbia University Medical Center to
develop microRNA-based diagnostic tests, for early detection as well as
prognosis, for diffuse large cell lymphoma, transformed follicular
lymphoma, and for chronic lymphocytic leukemia.
- Licensed Nanogen's Minor Groove Binder (MGB) probe technology for
polymerase chain reaction (PCR) for our microRNA-based diagnostics.
- Licensed Roche PCR technology for use in Rosetta Genomics'
microRNA-based diagnostics.
- Initiated a collaboration with NYU Medical Center to leverage the
potential of microRNA profiles to develop diagnostic tests for various
forms of congenital heart disease. This collaboration will screen for
specific microRNA biomarkers and signatures that may be used to develop
tests to diagnose and target congenital heart disease in newborns.
- Following the licenses from Roche and Nanogen for diagnostic
applications, Rosetta Genomics and U.S Genomics have mutually decided to
terminate their collaboration focused on the use of U.S. Genomics' microRNA
expression profiling platform.
Conferences and Events
Rosetta Genomics presented at the following conferences and events:
- American Association for Cancer Research (AACR) - The Role of
Non-coding RNAs in Cancer, October 31-November 3, 2007, Cambridge, MA
- Gene-Cards symposium, November 11, 2007, Weizmann Institute of
Science
- CELCC-ESMO predictive factors in lung cancer December 7-8, 2007,
Vienna, Austria
- RBC Healthcare conference, December 12, 2007, New York, NY
Future Conferences and Events
Rosetta Genomics will present at the following upcoming events:
- CHI MicroRNA in Human Disease and Development conference, March
10-11, 2008, Cambridge, MA
- AACR Annual Meeting, April 12-16, 2008, San Diego, CA
Conference Call Information
Rosetta Genomics will host a conference call at 8:30 a.m. ET today to
discuss fourth-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 44-20-8196-1996. The access code for the replay is
181543#. The replay will be available until March 7, 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.
About microRNAs
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 leading molecular diagnostics
company developing microRNA-based technologies used in the development of
diagnostic tests and therapeutics. 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 to develop a
full range of microRNA-based diagnostic and therapeutic tools, focusing
primarily on cancer and various women's health indications. The company
expects the first microRNA diagnostic tests based on its technology to be
launched during 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 the 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 developing 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, 2006 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.
ROSETTA GENOMICS LTD. AND ITS SUBSIDIARY (A development stage company)
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
Year ended Three Months ended
December 31, December 31,
2007 2006 2007 2006
Unaudited
Operating expenses:
Research and development,
net $ 6,400 $ 4,781 $ 2,113 $ 1,335
Marketing and business
development 1,742 1,504 561 388
General and
administrative 2,903 1,860 857 507
Operating loss 11,045 8,145 3,531 2,230
Financial expenses
(income), net 3,616 (538) 4,695 (122)
Net loss $ 14,661 $ 7,607 $ 8,226 $ 2,108
Basic and diluted net
loss per Ordinary share $ 1.32 $ 2.98 $ 0.69 $ 0.82
Weighted average number
of Ordinary shares used
to compute basic and
diluted net loss per
Ordinary share 11,142,149 2,551,860 11,887,445 2,556,205
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENT OF OPERATION:
Year Ended Three Months ended
December 31, December 31,
2007 2006 2007 2006
Unaudited
GAAP net loss as
reported $ 14,661 $ 7,607 $ 8,226 $ 2,108
NON-GAAP Adjustment:
Expenses reported for
stock-based compensation
Research and development,
net (260) (247) (63) (77)
Marketing and business
development (225) (49) (67) (32)
General and
administrative (550) (696) (181) (193)
Impairments of investments
in marketable securities
Financial expenses
(income), net (5,009) - (5,009) -
Total Adjustment $ (6,044) $ (992) $ (5,320) $ (302)
NON-GAAP net loss $ 8,617 $ 6,615 $ 2,906 $ 1,806
NON-GAAP Basic and
diluted net loss per
Ordinary share $ $ 0.77 $ 2.59 $ 0.24 $ 0.70
ROSETTA GENOMICS LTD. AND ITS SUBSIDIARY (A development stage company)
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)
December 31,
2007 2006
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 13,590 $ 5,228
Short-term bank deposits 112 5,149
Marketable securities 8,251 386
Other accounts receivable and prepaid
expenses 297 134
Deferred issuance costs - 1,787
Total current assets 22,250 12,684
LONG-TERM INVESTMENTS 2,391 -
SEVERANCE PAY FUND 144 98
PROPERTY AND EQUIPMENT, NET 1,253 461
Total assets $ 26,038 $ 13,243
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank loan, current
maturities of capital lease and of
long-term loan $ 247 $ 48
Trade payables 516 745
Other accounts payable and accruals 1,102 750
Total current liabilities 1,865 1,543
LONG-TERM LIABILITIES:
Long-term bank loan and capital
lease 16 29
Deferred revenue 228 228
Accrued severance pay 324 344
Total Long-term Liabilities 568 601
COMMITMENTS AND CONTINGENT LIABILITIES
SHAREHOLDERS' EQUITY:
Share capital: 27 17
Additional paid-in capital 58,984 31,958
Other comprehensive income 86 3
Deferred stock-based compensation - (48)
Deficit accumulated during the
development stage (35,492) (20,831)
Total shareholders' equity 23,605 11,099
Total liabilities and shareholders'
equity 26,038 $ 13,243
[1] Avastin is a registered trademark of Genentech, Inc.
Contact: Media
Rachel Spielman
T: +1-212-583-2714
E: media@rosettagenomics.com
Investors
Ron Kamienchick
T: +1-646-509-1893
E: investors@rosettagenomics.com
SOURCE Rosetta Genomics Ltd
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CONTACT:
Contact: Media: Rachel Spielman, T:
+1-212-583-2714, E: media@rosettagenomics.com; Investors: Ron
Kamienchick, T: +1-646-509-1893, E: investors@rosettagenomics.com
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