NEW BRUNSWICK, N.J. and REHOVOT, Israel, March 27, 2007 (PRIME NEWSWIRE) -- Rosetta Genomics (Nasdaq:ROSG), today reported its consolidated financial results for the fourth quarter and year ended December 31, 2006.
"2006 was characterized by significant progress across our business, culminating in the completion of our initial public offering on March, 2 2007," said Amir Avniel, President and CEO of Rosetta Genomics. "We achieved several key business objectives, both through our new collaborations as well as our licensing agreements. Among these prominent milestones, several are notable. First, we are excited to have received a "Notice of Allowance" from the USPTO, for two of our patent applications covering human and viral microRNAs. With regards to our development programs, we have begun collaborating with Isis Pharmaceuticals, Inc., on the development of a microRNA-based therapeutic for liver cancer. We have also strengthened our intellectual property portfolio by establishing licensing agreements with Rockefeller University, Max-Planck-Innovation Gmbh, the licensing agent for the Max Planck Society, and Johns Hopkins University. Through these agreements, we now hold exclusive and co-exclusive licensing rights, from the three leading academic institutions that have discovered microRNAs. We believe our current intellectual property portfolio now covers the majority of known human microRNAs. Finally, we completed the initial public offering of our ordinary shares on The NASDAQ Global Market on March 2, 2007, resulting in net proceeds of approximately $26.2 million. I believe that this progress strengthens our position as one of the leaders in the microRNA field, and will allow us to continue advancing our development programs in future"
Cash, Cash Equivalents, Short term Bank Deposit and Marketable Securities
On December 31, 2006, we had cash, cash equivalents, short term bank deposit and marketable securities of $10.8 million, compared to $4.9 million on December 31, 2005. The increase in the company's liquidity from the prior year was primarily due to net proceeds of $13.8 million from issuing preferred shares in a private placement early in 2006 and the exercise of warrants. We received approximately $26.2 million in net proceeds from our initial public offering of 4,312,500 shares in March 2007.
Net Loss
The net loss for the fourth quarter of 2006 was $2.1 million, or $0.82 per share, as compared to $1.8 million, or $0.72 per share, in the fourth quarter of 2005. The net loss for the fourth quarter of 2006 included $301,000 of non-cash stock-based compensation charges, compared to $65,000 in the fourth quarter of 2005.
For the year ended December 31, 2006, net loss was $7.6 million, or $2.98 per share, compared to a net loss of $5.8 million, or $2.35 per share, for the year ended December 31, 2005. The net loss for the year ended December 31, 2006 included $992,000 of non-cash stock-based compensation charges, compared to $248,000 in 2005.
Research and development expenses
Research and development expenses were $1.3 million in the fourth quarter of 2006, including $77,000 of non-cash stock-based compensation, as compared to research and development expenses of $1 million in the fourth quarter of 2005 which included $32,000 of non-cash stock-based compensation. This increase resulted primarily from an increase in purchasing of tissue samples and other research related materials as we made progress in our Cancer of Unknown Primary (CUP) diagnostic program as well as an increase in costs relating to our intellectual property and costs associated with license fees.
Research and development expenses were $4.8 million for the year ended December 31, 2006, including $247,000 of non-cash stock-based compensation, as compared to $3.2 million for the year ended December 31, 2005, which included $73,000 of non-cash stock-based compensation. Research and development expenses for the year ended December 31, 2006 increased as we made progress with our proprietary pipeline, primarily the CUP program, as well as due to an increase in expenses relating to our intellectual property and costs associated with license fees as well as research and development costs related to our wholly owned U.S. subsidiary.
Marketing and business development expenses
Marketing and business development expenses were $388,000 in the fourth quarter of 2006, including $32,000 of non-cash stock-based compensation, as compared to $263,000 in the fourth quarter of 2005. Marketing and business development expenses included no non-cash stock-based compensation in the fourth quarter of 2005. This increase resulted primarily from an increase in salaries and related expenses offset by costs related to consultation and legal expenses related to the negotiations on a number of collaborations executed early in 2006.
Marketing and business development expenses were $1.5 million for the year ended December 31, 2006, including $49,000 of non-cash stock-based compensation, as compared to $865,000 for the year ended December 31, 2005. Marketing and business development expenses included no non-cash stock-based compensation in 2005. This increase resulted primarily from an increase in salaries and related expenses from the addition of business development and marketing personnel to support our alliances and expanding research and development collaborations.
General and administrative expenses
General and administrative expenses were $507,000 in the fourth quarter of 2006, including $192,000 of non-cash stock-based compensation, as compared to $214,000 in the fourth quarter of 2005 which included $33,000 of non-cash stock-based compensation. This increase resulted primarily from an increase in salaries and related expenses from the addition of key members to our management team, including several senior managers in finance and accounting.
General and administrative expenses were $1.9 million for the year ended December 31, 2006, including $696,000 of non-cash stock-based compensation, as compared to $1.1 million for the year ended December 31, 2005, which included $175,000 of non-cash stock-based compensation. This increase resulted primarily from an increase in salaries and related expenses from the addition of key members to our management team, including several senior managers in finance and accounting.
Financial income (expenses), net
Net financial income was $122,000 in the fourth quarter of 2006, as compared to net financial expenses of $294,000 in the fourth quarter of 2005. Financial income in the fourth quarter of 2006 was derived primarily from interest income on bank deposits. Financial expenses in the fourth quarter of 2005 included $315,000 amortization of discount related to a convertible loan and compensation expenses related to warrants granted under a finder fee agreement, which were offset in part by interest income.
Net financial income was $538,000 for the year ended December 31, 2006, as compared to net financial expenses of $660,000 for the year ended December 31, 2005. Financial income in 2006 was derived primarily from interest income on bank deposits. Financial expenses in 2005 included issuance costs and amortization of discount related to a convertible loan and compensation expenses related to warrants granted under a finder's fee agreement, which were offset in part by interest income.
2006 Corporate Highlights
-- We advanced the development of our CUP diagnostic test for Cancer
of Unknown Primary (CUP), and were able to recognize 11 different
tumor types by measuring the expression of 9 microRNAs. This data
was presented at the following conferences:
- American Association of Cancer Research's (AACR) Molecular
Diagnostics in Cancer Therapeutic Development conference,
September 2006.
- Gordon Conference on New Frontiers in Cancer Detection and
Diagnosis, January 2006
- Keystone Symposium, January 2007
-- Throughout 2006, Rosetta Genomics presented several updates on
our advancement in microRNA research, including the following
scientific meetings and publications:
- Keystone, January 2006
- Proceedings of the National Academy of Sciences (PNAS), March
2006
- Bio, April 2006
- Beyond Genome, June 2006
-- Received a "Notice of Allowance" from United States Patent and
Trademark Office (USPTO) for two of our patent applications
covering human (10/310,914) and viral (10/604,944) microRNAs.
-- In January 2006, we entered into a research collaboration
agreement with Isis Pharmaceuticals, Inc., under which we agreed
to discover and develop drugs that regulate microRNAs involved in
Hepatocellular carcinoma (HCC), the most prevalent type of liver
cancer. The research collaboration is partially funded by the
Israel United-States Bio-national Industrial Research and
Development Foundation (BIRD).
-- In January 2006, we entered into a collaboration and license
agreement with Ambion Diagnostics, Inc., now Asuragen, Inc. Under
the agreement, Asuragen and we agreed to jointly develop products
for the diagnosis of prostate cancer using microRNAs.
-- In May 2006, we signed a royalty-bearing, co-exclusive, worldwide
license agreement with The Rockefeller University. Under this
agreement, we were granted the right to make, use and sell
Rockefeller's proprietary microRNAs for diagnostic purposes
including a limited right to sublicense. The agreement covers
microRNAs and microRNA candidates, including approximately 80
biologically validated human microRNAs and approximately 30
biologically validated viral microRNAs.
-- In June 2006, we entered into a royalty-bearing, co-exclusive,
worldwide license agreement with Max Planck Innovation GmbH, the
technology transfer agency of the Max Planck Society. Under this
agreement, we licensed from Max Planck the rights to its
proprietary microRNAs for diagnostics purposes, including
approximately 110 biologically validated human microRNA. In
addition, in December 2006, we entered into another
royalty-bearing, non-exclusive, worldwide license agreement with
Max Planck. Under this agreement, we licensed from Max Planck the
rights to its proprietary microRNAs for research purposes.
-- In August 2006, we signed a royalty-bearing, exclusive, worldwide
license agreement with Johns Hopkins University. Under this
agreement, we have exclusively licensed from Johns Hopkins the
rights to its proprietary microRNAs for all fields and
applications. The agreement covers approximately 130 biologically
validated microRNAs.
About microRNAs
MicroRNAs (miRNAs) are recently discovered, naturally occurring small RNAs that act as protein 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 levels in certain diseased versus normal tissues. As a result, these differences potentially provide for a novel diagnostic strategy for many diseases. MicroRNAs are thought to play a key role in the differentiation of cells into specific cell types performing various functions in the body.
About Rosetta Genomics
Rosetta Genomics is a leader in the development of microRNA-based diagnostics 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 strategic alliances with leading biotechnology companies, Rosetta Genomics is working to develop a full range of diagnostic and therapeutic products based on microRNAs. The company's primary focus is in the development of microRNA-based products to diagnose and treat different forms of cancer and infectious diseases.
The Rosetta Genomics logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3509
Forward-Looking Statement Disclaimer
Various statements in this release concerning Rosetta's future expectations, plans and prospects 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: Rosetta's approach to discover and develop novel diagnostics products, which is unproven and may never lead to marketable products; Rosetta's ability to fund and the results of further pre-clinical and clinical trials; obtaining, maintaining and protecting 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; the successful development of Rosetta's product candidates, all of which are in early stages of development; obtaining regulatory approval for products; competition from others using technology similar to Rosetta's and others developing products for similar uses; Rosetta's dependence on collaborators; and Rosetta's short operating history; as well as those risks more fully discussed in the "Risk Factors" section of Rosetta's most recent Registration Statement on Form F-1 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.
CONDENSED CONSOLIDATED BALANCE SHEET DATA
---------------------------------------------------------------------
In thousands (except share and per share data)
Dec. 31, Dec. 31,
-------- --------
2006 2005
-------- --------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 5,228 $ 4,917
Short-term bank deposits 5,149 --
Marketable securities 386 --
Other accounts receivable
and prepaid expenses 134 68
Deferred issuance costs 1,787 --
-------- --------
Total current assets 12,684 4,985
SEVERANCE PAY FUND 98 41
PROPERTY AND EQUIPMENT, NET 461 343
-------- --------
Total assets $ 13,243 $ 5,369
======== ========
LIABILITIES AND SHAREHOLDERS'
EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
Short-term bank loan,
current maturities of
capital lease and
Of long-term loan 48 $ 73
Trade payables 745 395
Deferred revenue 228 228
Other accounts payable
and accruals 750 534
Shareholder's loan -- 110
-------- --------
Total current liabilities 1,771 1,340
LONG-TERM LIABILITIES:
Long-term bank Loan and
lease obligations 29 --
Accrued severance pay 344 122
-------- --------
Total Long-term Liabilities 373 122
-------- --------
CONVERTIBLE LOAN -- 6,230
-------- --------
SHAREHOLDERS' EQUITY (DEFICIENCY):
Share capital: 17 11
Additional paid-in capital 31,958 10,997
Other comprehensive income 3 --
Deferred stock-based compensation (48) (107)
Deficit accumulated during the
development stage (20,831) (13,224)
-------- --------
Total shareholders'
equity (deficiency) 11,099 (2,323)
-------- --------
Total liabilities and
shareholders' equity (deficiency) $ 13,243 $ 5,369
======== ========
ROSETTA GENOMICS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
---------------------------------------------------------------------
In thousands (except share and per share data)
Three months ended Year ended
December 31, December 31,
--------------------------------------------------
2006 2005
(Unaudited) (Unaudited) 2006 2005
------------------------ ----------- -----------
Operating expenses:
Research and
development, net $ 1,335 $ 1,036 $ 4,781 $ 3,173
Marketing and
business development 388 263 1,504 865
General and
administrative 507 214 1,860 1,145
----------- ----------- ----------- -----------
Operating loss 2,230 1,513 8,145 5,183
Financial expenses
(income), net (122) 294 (538) 660
----------- ----------- ----------- -----------
Net loss $ 2,108 $ 1,807 $ 7,607 $ 5,843
=========== =========== =========== ===========
Basic and diluted
net loss per
Ordinary share $ 0.82 $ 0.72 $ 2.98 $ 2.35
=========== =========== =========== ===========
Weighted average
number of Ordinary
shares used to
compute basic and
diluted net loss
per Ordinary share $ 2,556,205 $ 2,509,258 $ 2,551,860 $ 2,495,366
=========== =========== =========== ===========
Pro forma basic
and diluted net
loss per share $ 0.28 $ 0.24 $ 1.01 $ 0.78
=========== =========== =========== ===========
Weighted average
number of shares
used to compute
basic and diluted
pro forma net
loss per share $ 7,504,809 $ 7,457,862 $ 7,500,464 $ 7,443,970
=========== =========== =========== ===========