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Rosetta Genomics Cuts Q1 Loss, Sells Parkway Clinical Labs

NEW YORK (GenomeWeb News) – Rosetta Genomics today reported that it cut its first-quarter net loss 8 percent and has sold its Parkway Clinical Laboratories business for $2.5 million, despite having purchased the lab just last year for $2.9 million.

The Rehovot, Israel-based miRNA diagnostics maker brought in total revenues of $654,000 for the three-month period ended March 31, compared to no revenues for the first quarter of 2008. The firm noted that the revenue related primarily to the business of Parkway.

Its net loss for the quarter declined to $3.6 million, or $.30 per share, from $3.9 million, or $.33 per share.

Rosetta trimmed its R&D expenses 29 percent to $1.7 million from $2.4 million, while its marketing, business development, general, and administrative spending increased 62 percent to $2.1 million from $1.3 million.

Rosetta finished the quarter with $10.7 million in cash and cash equivalents, and $1.9 million in short-term bank deposits. It said that it expects its 2009 cash burn to be around $10 million.

Amir Avniel, president and CEO of Rosetta, said in a statement that the firm has turned its attention "almost exclusively to the development of a colon cancer screening test." The firm currently sells three miRNA-based cancer diagnostic tests, which it launched late last year.

Rosetta also said today that it has sold its Parkway Clinical Laboratories business in a management buyout for $2.5 million, which will be paid as a fixed percentage of revenues over six years. Rosetta said that Parkway's primary business of drugs of abuse and pre-employment drug testing does not fit with the company's core operations.

"However, with its CLIA certification Parkway helped facilitate Rosetta Genomics Laboratories, or RGL, in obtaining CLIA certification," Avniel said. "We will continue to perform our microRNA tests at RGL."

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