By Doug Macron
Rosetta Genomics this week announced that it has pushed back the expected launch date for its blood-based colorectal cancer screen until the middle of next year as it addresses inconsistencies observed in measuring the microRNA biomarkers used in the test.
The company also said that CEO Amir Avniel intends to step down from his position at the company in order to take the reins of Rosetta’s roughly year-old plant biotechnology unit, Rosetta Green.
Rosetta made the disclosures during its second-quarter earnings release, which included a slight increase in net loss as the company experienced a sharp rise in marketing and business-development expenses related to the commercialization of its first three miRNA diagnostics.
Earlier this year, Rosetta announced that it was shifting its business focus toward developing miRNA-based tests for screening, rather than diagnosing, disease.
Part of that move includes a greater focus on tests that require blood samples instead of tissue samples. As such, the company moved its planned blood-based colon cancer screen, dubbed miRscreen Colon, to the front of its development pipeline, which is currently being expanded to include additional, undisclosed blood-based tests for cancer.
As late as May this year, Rosetta was predicting that miRscreen Colon could hit the US market by the end of 2009, buoyed by data showing that the expression patterns of two miRNAs in serum can be used to identify the presence of colon cancer with 91 percent sensitivity and 72 percent specificity in a study of 120 patients.
“Since then, we have continued our efforts to improve the technology that will enable us to quantify cancer-related microRNAs in body fluid samples in a more sensitive and reproducible manner,” Avniel said during a conference call held this week to discuss the second-quarter results.
Specifically, the company is repeating discovery-phase experiments on RNA extracted from serum samples under “improved conditions” and with an expanded set of miRNA biomarkers, he said. “By the end of this year, we intend to screen a total of 350 samples and to set the specific microRNAs that will be used for the assay.”
In terms of a development timeline, Avniel said that Rosetta expects to develop and test the miRscreen Colon assay with additional serum samples in the first quarter of next year. In the second and third quarters of 2010, the company intends to collaborate with various US hospitals to obtain up to 1,000 more samples for analysis.
If it can meet this timeline, “we would expect to be able to commercialize miRscreen Colon by mid-2010,” he said.
Commenting on the roughly six-month delay that this timetable represents over the guidance provided by the company earlier this year, Avniel said Rosetta has run into “technical obstacles resulting in a different level of the measurement of microRNAs in different serum samples” — an issue the company believes is tied to inconsistencies in the way serum samples are obtained.
“We think that [it’s] related to the protocols for taking the blood, [for example], the time from taking the blood until [the serum is analyzed or] the time that the serum is at room temperature until it comes to us,” Avniel said during the call.
These and other differences in how the blood is handled may “influence the measurement of the microRNAs [and] can actually change the results we are seeing,” he said. “Therefore, we are still working on resolving this technical problem to ensure that we are measuring the cancer-related microRNAs in an accurate way.”
[ pagebreak ]
Meanwhile, Avniel noted during the call that while Rosetta no longer focuses on miRNA drugs — in fact, the company now bills itself strictly as a molecular diagnostics firm — it is still aiming to realize value from the therapeutic potential of its technology and intellectual property.
“We have worked with a number of [pharmaceutical] companies on initial pilot studies to develop various microRNA solutions to various indications, and we have obtained promising results with some of these studies,” he said. “If successful in future R&D studies, we believe there is the potential to enter into licensing collaborations with these pharmaceutical companies and create significant value for Rosetta through the licensing of our IP for use in drug development.”
He did not provide any details on Rosetta’s ongoing collaboration with Regulus Therapeutics on the development of a miRNA-targeting liver cancer drug (see RNAi News, 9/25/2008).
After nine years with Rosetta, Anviel said he plans to step down in order to lead Rosetta Green once a successor has been found.
According to Avniel, Rosetta Green, which is barely a year old, would stand to benefit more from his expertise than Rosetta Genomics, which has already three products on the market and is poised to introduce its fourth next year.
As reported by RNAi News, Rosetta Green is focused on leveraging its parent firm’s miRNA know-how and IP to become a partner for companies operating in the agricultural- and plant-biotechnology space (see RNAi News, 11/3/2008).
“My skills are in entrepreneurship … taking very early-stage … products and bringing them into the market,” Avniel said during the call. “It’s the right time for me to step out and find a new CEO with a lot of experience in commercialized products, specifically molecular diagnostics.”
Rosetta did not provide any guidance on when a replacement CEO is expected to be found, and company Chairman Yoav Chelouche noted during the call that he expects to be “more actively involved in the operations of Rosetta … during the search period.”
The Second Quarter
In the quarter, Rosetta’s net loss edged up to $3.8 million, or $0.27 per share, from $3.7 million, or $0.31 per share, in the same period the year before.
Research and development spending in the quarter fell to $1.4 million from $2.2 million, reflecting expense reimbursement for projects in the current quarter and corporate cost-cutting measures.
Marketing and business costs, meanwhile, rose to $1.4 million from $434,000, an increase the company attributed to expenses associated with its US licensing deal for its three miRNA diagnostics with Prometheus Laboratories (see RNAi News, 4/16/2009).
Rosetta also posted second-quarter revenues of $14,000, compared with zero revenues in the year-ago quarter, as it began processing tissue samples for its diagnostics at its laboratory.
As of June 30, Rosetta had cash, cash equivalents, short- and long-term back deposits, and marketable securities totaling $16.7 million. The company said it continues to expect its cash burn for the year to be about $10 million.