NEW YORK (GenomeWeb News) – Rosetta Genomics today reported third-quarter revenues of $136,000, compared to no revenues for the comparable period of 2009.
The Rehovot, Israel-based developer of microRNA-based diagnostic products has three tests on the market and is preparing to launch next-generation versions of those tests.
Its miRview meso test differentiates lung cancer from mesothelioma, while its miRview mets is designed to determine the source of cancers of unknown primary origin, and its miRview squamous is designed to differentiate squamous from non-squamous non-small cell lung cancer. Rosetta offers the tests through its Philadelphia-based CAP-accredited, CLIA-certified lab.
The firm posted a net loss that was roughly flat with Q3 2009 of $3.4 million. Its net loss per share for the three-month period ended Sept. 30 was $.20 versus $.24 for the prior year's Q3.
Rosetta reported R&D spending of $1.7 million for the quarter, down slightly from $1.8 million year over year. Its SG&A spending was flat at roughly $1.7 million.
The firm recently announced that it had settled an outstanding arbitration with Prometheus Laboratories and regained US commercial rights to the miRview mets, miRview squamous, and miRview meso tests.
For Q3 2010, it reported expenses of $554,000 related to the settlement.
Rosetta also is in the midst of a restructuring aimed at reducing the company's monthly burn rate 32 percent. The restructuring, announced in early October, included trimming the firm's global workforce by 20 percent, or 14 positions, primarily in research and development and general and administrative positions. In addition, its remaining employees moved to a four-day work week and took a 20 percent cut in salary.
Rosetta finished the quarter with quarter with $2.7 million in cash and cash equivalents, as well as $2 million in marketable securities.
Today, it separately announced that it has signed a definitive agreement to raise gross proceeds of around $2.5 million through a private placement with institutional investors. Under terms of the offering, Rosetta will sell an aggregate of 2.5 million ordinary shares at a price of $1 per share. In addition, purchasers will receive Series A warrants for an aggregate of 1,250,000 ordinary shares at an exercise price of $1.30 per share and Series B warrants to purchase up to an aggregate of 625,000 ordinary shares at an exercise price of $0.01 per share.
The Series A Warrants are exercisable immediately, have a term of five years, and the exercise price is subject to future adjustment for various events, such as stock splits or dilutive issuances, said Rosetta. The Series B Warrants will be automatically exercised on the 33rd trading day following the effective date of the resale registration statement, but only in the event that 80 percent of the average of the volume weighted average price of the ordinary shares for the 10 days following the effective date of the resale registration statement is less than $1.
Rosetta said that it will use the proceeds for working capital purposes.
The firm also noted in its financial release today that it expects to receive a notification from Nasdaq that it is not in compliance with a rule governing stockholders' equity. The Nasdaq Capital Market requires a minimum of $2.5 million in stockholders' equity. As of Sept. 30, Rosetta had stockholders' equity of $700,000.
If the firm receives such a notification, it will have 45 days to submit a plan to Nasdaq detailing its efforts to regain compliance. If such a plan is accepted by the exchange, Rosetta would have up to 180 days to regain compliance.
In early Tuesday trade, its shares were down nearly 15 percent at $1.06.