Rosetta Genomics this week announced a nearly four-fold increase in revenues for the first half of 2013 as the company ramped up its in-house sales and marketing efforts and expanded insurance coverage for its lead microRNA-based cancer diagnostic.
The company also said that it is ramping up efforts to promote its other miRNA diagnostics while continuing to develop therapeutics targeting the small, non-coding RNAs.
After a period of financial difficulty that saw Rosetta flirt with bankruptcy, the company restructured in late 2011, shedding 35 jobs while diverting resources away from development-stage initiatives and onto supporting the Cancer Origin Test — formerly known as miRview Mets2 — its flagship assay for determining the source of tumors of unknown primary origin.
In 2012, the company also closed a series of stock offerings that boosted it cash reserves and, importantly, received Medicare coverage for the Cancer Origin Test, formerly known as miRview Mets2 (GSN 5/17/2012). It also established its own US sales force to promote the product after running into trouble with former promotion partners including Prometheus Laboratory (
During a conference call held to discuss the six-month financial results, Rosetta President and CEO Kenneth Berlin cited the company's success in executing its strategy of focusing on demand generation, demand fulfillment, and payor management around the Cancer Origin Test.
To build demand, he said, Rosetta has launched a series of sales and marketing programs, which included maintaining a "strong presence" at this year's American Society of Clinical Oncology meeting and the creation of an online physicians portal on its corporate website, which "allows clinicians to order tests, review status reports, and receive patient test results directly from their office or remotely from mobile devices."
To meet increased demand, Rosetta this year doubled the processing capacity of its Philadelphia-based laboratory while adding support staff, Berlin added.
Meanwhile, "we have been placing considerable emphasis on payor management," he noted. In addition to receiving Medicare coverage for the Cancer Origin Test, under which the company receives $3,500 per test, Rosetta has closed credentialing agreements for the product with four preferred provider organizations.
This summer, the company signed with Three Rivers Provider Network and Prime Health Services, and this week it announced that it inked deals with FedMed and Fortified Provider Network. Based on these deals, the company estimates that the test is eligible for coverage for approximately 100 million people in the US, Berlin said.
In light of these developments, Rosetta also recently expanded its US sales territories from five to 12, and hired six new sales representatives, he added.
At the same time, Rosetta now aims to advance its other miRNA diagnostics through the reimbursement process and include them in its sales and marketing efforts, Berlin said.
The company's three other products include the Lung Cancer Test for differentiating primary lung tumors into small cell lung cancer, carcinoid, and squamous and non-squamous non-small cell lung cancer; the Kidney Cancer Test, which differentiates benign oncocytoma and the three most common subtypes of renal cell carcinoma; and the Mesothelioma Test for differentiating malignant pleural mesothelioma from carcinomas in the lung and pleura.
Meanwhile, the company continues to develop new diagnostics based on miRNA signatures in both biofluids and tissue, including one designed to "rule out a particular cancer thereby avoiding unnecessary surgeries," Berlin said.
When Rosetta was founded, the company aimed to develop both miRNA diagnostics and therapeutics. And while Rosetta's drug-development efforts have been put on the backburner in recent years, Berlin noted that the firm continues to see opportunities in the space and maintains a collaboration with Tel Aviv University to develop miRNA treatments for cancer.
First-half financials
For the six-month period ended June 30, Rosetta's revenues rose to $193,000 from $51,000 in the same period the year before.
The Israeli firm's net loss after discontinued operations was $6.3 million, or $0.68 a share, down from a loss of $6.6 million, or $5.35 a share, the year before.
Rosetta's research and development spending in the six-month period rose to $877,000 from $740,000 the year before.
The firm's marketing and business development costs surged to $3.6 million from $1.2 million, largely due to its efforts to drive commercialization of its products. Meanwhile, general and administrative expenses increased nearly $600,000 to $2 million, reflecting the addition of key executives and other personnel.
As of June 30, Rosetta had cash, cash equivalents, restricted cash, and short-term bank deposits totaling $28.9 million. It said that it anticipates its burn rate for the second half of the year will be in the range of $6 million to $7 million, and that its current resources are expected to fund its operations into 2015.