NEW YORK (GenomeWeb News) – Cancer Genetics today said that its first-quarter revenues jumped 45 percent year over year, as it reported financial results for the first time as a publicly traded company.
Revenues for the three months ended March 31 were $1.2 million, compared to $834,752 during the first quarter in 2012. Clinical test volume increased to 1,911 tests in the quarter, up 19 percent from 1,610 in the year-ago period, while average revenue per test rose 23 percent to $615 from $502 a year ago.
The company added that its wholly owned subsidiary CGI Italia increased DNA probe sales by 193 percent year over year to $44,000 in Q1 2013 from $15,000.
The Rutherford, NJ-based firm, which makes DNA-based cancer diagnostic tests, posted a profit of $2.4 million, compared to a net loss of $1.1 million in the first quarter a year ago. Its basic net income per share was $1.75 versus a basic net loss per share of $.81.
Though the firm posted a profit, overall, it had a diluted loss per share of $2.18 in Q1 2013, which was the result of a decrease of $5.3 million in the fair value of derivative warrant liability.
The firm also said its quarterly results included an income tax benefit of $664,000 from the sale of certain net operating losses.
The firm's R&D expenses were reduced 6 percent year over year in the quarter to $490,577 from $523,511. Its SG&A costs increased 54 percent to $2.0 million from $1.3 million.
Cancer Genetics finished the quarter with $216,872 in cash and cash equivalents. The firm went public a month ago, however, raising about $6.9 million in gross proceeds, or $5.0 million in net proceeds, the company said.
Moving forward, the company's growth strategy will focus on five steps, Cancer Genetics President and CEO Panna Sharma said on a conference call after the release of the earnings results. They include expanding the geographical reach of the firm, which has operated primarily in the New York City and New Jersey area, but has been expanding into Georgia, Texas, Iowa and other areas in the Midwest.
Cancer Genetics has already begun seeing the benefits of the move as several of its top clients during the first quarter came from outside of the New York/New Jersey geography, Sharma said. It will make new hires in the Midwest and the East Coast, he added, and will continue work to increase its exposure to community hospitals, health centers, and oncologists.
Another growth strategy centers on partnerships with biopharma. In March, Cancer Genetics announced a deal to provide Gilead Sciences with clinical trial services and molecular profiling of chronic lymphocytic leukemia patients.
"The biopharma community is aggressively moving toward biomarker-based therapeutics, and due to our development programs in the areas of hematological and urogenital cancers, we're really seeing a renaissance of therapeutics come out that are biomarker-based," Sharma said on the call. "We're in an ideal position to partner to help drive the changes that are needed for biotechs and pharma in the clinical trial programs and development of companion diagnostics and theranostics."
Additionally, the company will ramp up efforts with payors for reimbursement of its tests. Sharma said that discussions have begun and announcements about agreements with providers and payor groups are expected in the next few months.
Another growth strategy focuses on Cancer Genetics' joint venture with the Mayo Foundation for Medical Education and Research. The partners will create a new company, 50-50 owned by Cancer Genetics and Mayo, to develop oncology diagnostic services and tests based on next-generation sequencing. Sharma declined to provide details about the joint venture, saying that decisions are being made about projects that will be targeted and an announcement about the JV will be forthcoming soon.
Lastly, Cancer Genetics will continue investing in new tests in the hematologic and urogenital cancer spaces as well as investing in existing tests to improve their performance, Sharma said.
"We made significant progress during this past quarter, and it places us in a great position for 2013," he said in a statement. "The growth in clinical volumes has been due to both new relationships with community hospitals and biotechnology companies using our proprietary programs and from existing customers expanding the range of oncology-focused biomarker testing [the company] is providing them.
"We see this past quarter, which was completed prior to our IPO, as a good foundation for further growth in 2013 as we continue our investment in sales professionals, marketing, and brand awareness," he added.