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Cancer Genetics' Discovery Services Drive Q3 Revenue Gains

NEW YORK — Cancer Genetics on Wednesday reported a nearly threefold jump in its third quarter revenues on a strong performance by its core discovery services operations.

For the three-month period ended Sept. 30, Cancer Genetics' revenues climbed to $2.1 million from $535,000 in the same period a year earlier. The revenues were generated entirely by discovery services, which includes contract research for cancer and immuno-oncology drug discovery and development.

Earlier this year, Rutherford, New Jersey-based Cancer Genetics completed the sales of its biopharma services business to Interpace Diagnostics for $23.5 million and its clinical laboratory business to SiParadigm for $1 million. Both divested businesses were presented as discontinued operations in the quarterly report.

"Our discovery services business is self-sustaining, thereby eliminating any further operating cash burn," Cancer Genetics CEO John Roberts said in a statement. "We are now focused on collecting cash that is due to the company, substantially reducing our accounts payable with our unsecured creditors, focusing on the operational elements of our discovery services business, and continuing to explore strategic alternatives, which could include the sale of other assets, a merger, or other strategic transactions."

Cancer Genetics said it has thus far received $8.3 million from Interpace and around $800,000 from SiParadigm, and that it recently repaid approximately $9 million in senior secured debt and roughly $2.6 million on two unsecured notes. It also agreed to pay NovellusDx roughly $1.1 million in cash, as well as $450,000 over a nine-month period, in order to settle a dispute over the companies' scuttled merger deal, and it is working with HC Wainwright on potential strategic transactions.

Cancer Genetics post a net profit of $2.0 million, or $.98 per share, versus a year-ago loss of $8.5 million, or $9.34 per share.

The firm's SG&A spending in the quarter dropped 30 percent to $1.6 million from $2.3 million. Also during the most recent quarter, the firm recognized a charge of $2.9 million for impairment of goodwill.

At the end of September, Cancer Genetics had cash and cash equivalents totaling $2.1 million.

In Wednesday morning trade on the Nasdaq, shares of Cancer Genetics soared 200 percent to $6.24.