NEW YORK (GenomeWeb News) – Rosetta Genomics today announced it is eliminating 24 jobs as part of a corporate restructuring that is expected to reduce its monthly cash burn rate by half, resulting in annual operating expense savings of $4.2 million.
The Israel-based microRNA molecular diagnostics firm, which recently reported a 39 percent drop in first-half 2011 revenues year over year, said that a further 11 jobs will be eliminated "as soon as it can provide termination notices under Israeli employment regulations."
The positions are primarily in R&D and general and administrative functions in Israel. The cuts take effect in early November and are being taken in order to ensure that Rosetta has enough cash and equivalents to enable it to raise additional capital, the company said.
As of June 30, it reported having $3.1 million in cash and cash equivalents.
In a statement Kenneth Berlin, president and CEO of the firm, said that the recent launch of its US oncology sales force has moved the firm from an R&D operation to a commercial entity, and the changes being implemented "will allow us to concentrate our resources on growing sales of our miRview mets2 and miRview lung and other microRNA diagnostics in the US."
He added that Rosetta's partnership with PACE Claims Service is anticipated to create sales momentum with the miRview meso diagnostic test for the differentiation of mesothelioma from carcinomas in the lung or pleura.
Since the launch of the US sales team, demand for the company's products have seen a "significant increase," Berlin said. "Moving forward our restructured research and development efforts will focus on advancing our blood-based microRNA diagnostics, specifically in heart failure, as well as on certain projects for potential partnerships that would provide the company with additional cash infusions," he said.
The company separately announced today that it has granted Avatao Biotech the exclusive rights to market miRview mets and miRview mets2 diagnostics tests in China. Avatao will also have the rights to market one additional Rosetta product in China, which it will choose within a year.
Avatao, a diagnostic development firm based in China, is being supported by Kunshan microRNA Institute, which focuses on microRNA technologies.
Under the terms of the deal, Avatao has the right to market and sell specified miRview tests in China, including Hong Kong and Macau, as well as Taiwan. Rosetta will receive upfront payments and regulatory and milestone payments that could potentially exceed $8 million, as well as royalties based on net sales.
"Expanding into these Asian markets is a key element of our globalization strategy and offers tremendous growth opportunities," Berlin said in a statement.