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Rosetta Expands Dx Pipeline, Plans to Shift Marketing Duties to New CLIA Lab

Rosetta Genomics this week announced three new additions to its microRNA diagnostics pipeline, bringing to nine the total number of tests based on the small, non-coding RNAs the company is developing.
The disclosure was made during Rosetta’s second-quarter earnings conference call, where the company reported a 60-percent jump in net loss driven by a 29-percent rise in R&D spending.
The first of the new diagnostic candidates is a test to detect the presence of colon cancer using an miRNA signature that can be identified in blood serum, Rosetta President and CEO Amir Avniel said during the call.
“This test has enormous market potential considering the fact that doctors recommend routine [colonoscopy for] colon-cancer screening for all people over 50, and studies show that compliance for this recommendation is low,” he said. “Having a [blood-based] test that can identify high-risk patients may increase the compliance for colonoscopy exams and may help increase early detection of this … disease.”
Avniel said that the company has also begun working on a test to assess the risk of “superficial bladder cancer becoming invasive … [and one] to predict [the risk of] colon cancer recurrence.”
He declined to elaborate on the new tests or when they might be commercialized, but said that additional details will be provided during a Rosetta investor meeting in November.
Rosetta announced the pipeline additions about two months after it said it had added three other tests to its stable of miRNA-based diagnostics: one for predicting response to ovarian cancer treatment, one for gauging the risk of gastric cancer recurrence, and one for differentiating small from non-small cell lung cancer (see RNAi News, 6/19/2008). These three tests are expected to reach the market in 2009 and 2010.
The company’s most advanced diagnostic candidate, however, remains its test for differentiating squamous from non-squamous non-small cell lung cancer, which received market approval from the New York State Department of Health Clinical Laboratory Evaluation Program in July (see RNAi News, 7/24/2008).
The company expects to begin selling the test, dubbed miRview Squamous, this year. Two other tests, one for determining the source of cancers of unknown primary origin called miRview Mets and one for differentiating lung cancer from mesothelioma called miRview Meso, are slated to hit the market next year.
Parkway to Drive Development
During this week’s conference call, Avniel also highlighted Rosetta’s recently completed $2.9 million acquisition of Clinical Laboratory Improvement Amendments-certified laboratory Parkway Clinical Laboratories (see RNAi News, 7/24/2008).
“With our first microRNA [diagnostic] approved for clinical use and the acquisition of a CLIA-certified laboratory, Rosetta Genomics is in the final stage of transforming into a commercial diagnostics company,” he said.

“Having a test that can identify high-risk patients [through a simple blood draw] may increase the compliance for colonoscopy exams and may help increase early detection of this … disease.”

“Parkway specializes in conducting clinical diagnostic tests and handles in excess of 170,000 specimens a year,” he added. Importantly, the acquisition will “allow Rosetta Genomics to expedite and gain full control over in-house development, validation, commercialization, marketing, and sales of our microRNA-based diagnostic tests.”
Avniel said that Rosetta has expanded Bensalem, Penn.-based Parkway’s operations by adding a second facility in Philadelphia, in which Rosetta is installing its proprietary microRNA-based diagnostics technology.
“We’ve started with the calibration of this lab and believe it will be fully operational shortly,” he added, noting that Rosetta anticipates co-marketing miRview Squamous through this facility with partner Columbia University Medical Center.
Before acquiring Parkway, Rosetta established an arrangement with CUMC under which the institution would commercialize miRview Squamous, miRview Mets, and miRview Meso.
However, a Rosetta spokesman told RNAi News this week that having its own CLIA lab will enable Rosetta to jointly market miRview Squamous with CUMC.
“We believe that initially, due to Columbia’s outreach in the state of New York, they will focus their efforts in that area, while we will focus on the rest of the country,” he said in an e-mail.
In the future, Rosetta expects to develop, validate, and commercialize miRNA tests itself through Parkway, he added.
In the second quarter, Rosetta’s net loss jumped to $3.7 million, or $0.31 per share, from a year-ago loss of $2.3 million, or $0.19 per share.
The company generated no revenues in the quarter.
Driving the losses was an increase in research and development spending to $2.2 million from $1.7 million in the second quarter last year. Marketing and business development expenses in the quarter edged up to $434,000 from $412,000 the year before, while general and administrative costs climbed to $896,000 from $595,000.
As of June 30, Rosetta had cash, cash equivalents, short- and long-term bank deposits, and marketable securities totaling $14.9 million.
Looking ahead, the Israeli company said that it expects to burn roughly $6 million in funding its operations through 2008.

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