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CORRECTING and REPLACING Response Genetics, Inc. Reports Third Quarter 2010 Financial Results

^{Published on 2010-11-05 03:41:15 - Market Wire}
 

LOS ANGELES--([ BUSINESS WIRE ])--Third Quarter Corporate Development Highlights, first bullet, first sentence should read:For the third quarter, total revenue for our ResponseDXa" genetic tests increased 58 percent to $3.0 million (sted For the third quarter, total revenue for our ResponseDXa" genetic tests increased 73 percent to $3.0 million).

"MDR1 and ERCC1 Expression Predict Outcome of Patients with Locally Advanced Bladder Cancer Receiving Adjuvant Chemotherapy"

The corrected release reads:

RESPONSE GENETICS, INC. REPORTS THIRD QUARTER 2010 FINANCIAL RESULTS

Response Genetics Inc. (Nasdaq:RGDX), a company focused on the development and sale of molecular diagnostic tests for cancer, today announced its consolidated financial results for the three and nine months ended September 30, 2010.

aWe are successfully executing on our strategy to take market share and expand the sales of our ResponseDXa" genetic tests. In addition, we are in a great position to take advantage of the increasing market in companion diagnostics,a said Kathleen Danenberg, Response Genetics president and CEO.

Third Quarter Corporate Development Highlights

• Expanded Sales and Distribution a" For the third quarter, total revenue for our ResponseDXa" genetic tests increased 58 percent to $3.0 million compared to $1.9 million (after adjusting for the one-time increase of $1.5 million resulting from the conversion to the accrual basis of revenue recognition) for the second quarter of 2010. Gross margin (Total Revenue less Cost of Revenue, as a percentage of Total Revenue) for the third quarter was 51 percent compared to 45 percent for the second quarter of 2010.Average revenue per case (previously described as test) was $1,175 for the third quarter. Total ResponseDXa" genetic tests ordered increased quarter over quarter. However, now that the Company is on the accrual basis for all ResponseDX sales, the Company will be focusing on total ResponseDX revenue, gross margin and average revenue per case.

• Publication on ERCC1 and MDR1 Expression in Bladder Cancer a" Data from Company sponsored gene expression analysis published in Neoplasia associated high expression of multidrug resistance gene 1 (MDR1) and excision repair cross-complementing 1 (ERCC1) gene expression with inferior outcome after adjuvant chemotherapy in patients with locally advanced bladder cancer. The paper, aMDR1 and ERCC1 Expression Predict Outcome of Patients with Locally Advanced Bladder Cancer Receiving Adjuvant Chemotherapya (Neoplasia (2010) 12, 628-636), was published online on or about August 5, 2010. The study used quantitative real-time RT-PCR to analyze formalin-fixed paraffin-embedded tumor samples from 108 patients with locally advanced bladder cancer. The Company plans to make available its ResponseDX: Bladdera" test in the future.

Third Quarter 2010 Results

Total revenue increased by 147 percent to $5.6 million for the third quarter ended September 30, 2010, compared to $2.3 million for the same period last year. Excluding the net revenue impact of $0.3 million resulting from the conversion to the accrual basis of revenue recognition for ResponseDX private payors, total revenue increased 135 percent to $5.3 million for the quarter ended September 30, 2010, compared to $2.3 million for the same period last year. The increase was primarily due to both an increase in ResponseDX revenues of $2.1 million and $1.2 million increase in pharmaceutical client revenue. Revenue from ResponseDX genetic tests increased by 226 percent to $3.0 million for the third quarter, compared to $0.9 million for the same period in 2009. Excluding the net revenue impact of $0.3 million resulting from the conversion to the accrual basis of revenue recognition for ResponseDX private payors, revenue from ResponseDX genetic tests increased by 198 percent to $2.7 million for the third quarter, compared to $0.9 million for the same period in 2009. Pharmaceutical client revenue increased 92 percent to $2.6 million, compared to $1.4 million in the third quarter of 2009.

Cost of revenue for the third quarter ended September 30, 2010 was $2.7 million, compared with $1.2 million for the same period ended 2009. Research and development expenses were $0.3 million for the third quarter of 2010, compared with $0.7 million for the same period in the prior year. General and administrative expenses were $2.0 million for the third quarter, compared with $1.3 million for the same period in 2009. Total operating expenses for the third quarter were $6.6 million, compared with $4.2 million for the same period last year. The primary reasons for the increase in total operating expenses are costs related to the continued expansion of the sales force, legal expenses associated with the proxy activities and billing services costs.

Response Geneticsa™ net loss for the third quarter ended September 30, 2010 was $1.06 million or a loss of $0.06 per share, compared with a net loss of $ 1.97 million, or a loss of $0.14 per share, for the same period last year. Excluding the net revenue impact of $0.3 million resulting from the conversion to the accrual basis for revenue recognition for ResponseDX private payors, the net loss for the three months ended September 30, 2010 was $1.3 million or a loss of $0.07 per share.

Nine Months Ended September 30, 2010

Total revenue increased by 162 percent to $15 million for the nine months ended September 30, 2010, compared to $5.7 million for the same period last year. Excluding the cumulative net revenue impact of $1.8 million resulting from the conversion from the cash to the accrual basis of revenue recognition for ResponseDX private payors, total revenue increased 131 percent to $13.2 million for the nine months ended September 30, 2010, compared to $5.7 million for the same period last year. The increase was primarily due to increases in both ResponseDX revenues of $6.6 million and $2.6 million increase in pharmaceutical client revenue. Revenue from ResponseDX genetic tests increased by 406 percent to $8.2 million for the nine months, compared to $1.6 million for the same period in 2009. Excluding the cumulative net revenue impact of $1.8 million resulting from the conversion from the cash to the accrual basis for revenue recognition for ResponseDX private payor revenue, revenue from ResponseDX genetic tests increased by 298 percent to $6.2 million for the nine months, compared to $1.6 million for the same period in 2009. The Companya™s pharmaceutical client revenue increased 52 percent to $6.4 million, compared to $4.0 million in the nine months of 2009.

Cost of revenue for the nine months ended September 30, 2010 was $7.4 million, compared with $3.9 million for the same period in 2009. Research and development expenses were $1.3 million for the nine months of 2010, compared with $1.7 million for the same period in the prior year. General and administrative expenses were $5.4 million for the nine months of 2010, compared with $4.5 million for the same period in 2009. Total operating expenses for the nine months of 2010 were $18.5 million, compared with $13.3 million for the same period last year. The primary reasons for the increase in total operating expenses were costs related to sales force expansion, increased legal fees associated with the proxy activities and billing services costs.

Response Geneticsa™ net loss for the nine months ended September 30, 2010 was $3.6 million or a loss of $0.20 per share, compared with a net loss of $7.6 million, or a loss of $0.60 per share, for the same period last year. Excluding the cumulative net revenue impact of $1.8 million resulting from the conversion to the accrual basis of revenue recognition for Response DX private payors, the net loss for the nine months ended September 30, 2010 was $5.3 million or a loss of $0.30 per share.

Cash and Cash Equivalents

Cash and cash equivalents at September 30, 2010, were $5.4 million, compared to $7.1 million at December 31, 2009.

About Response Genetics, Inc.

Response Genetics, Inc. (aRGIa) (the aCompanya) (Nasdaq: RGDX) is focused on the development and sale of molecular diagnostic tests for cancer. RGIa™s technologies enable extraction and analysis of genetic information from genes derived from tumor samples stored as formalin-fixed and paraffin-embedded specimens. In addition to diagnostic testing services, RGI generates revenue from the sales of its proprietary analytical pharmacogenomic testing services of clinical trial specimens to the pharmaceutical industry. The Company was founded in 1999 and its principal headquarters are located in Los Angeles, California. For more information, please visit [ www.responsegenetics.com ].

Forward-Looking Statement Notice

Except for the historical information contained herein, this press release and the statements of representatives of RGI related thereto contain or may contain, among other things, certain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995.

Such forward-looking statements involve significant risks and uncertainties. Such statements may include, without limitation, statements with respect to the Companya™s plans, objectives, projections, expectations and intentions, such as the ability of the Companyto continue to expand its sales of its genetic tests and increase its market share, the potential for using the results of this research to develop diagnostic tests for cancer, the ability of the Company to expand its ResponseDXa" tests , and other statements identified by words such as aprojects,a amay,a acould,a awould,a ashould,a abelieves,a aexpects,a aanticipates,a aestimates,a aintends,a aplansa or similar expressions.

These statements are based upon the current beliefs and expectations of the Companya™s management and are subject to significant risks and uncertainties, including those detailed in the Companya™s filings with the Securities and Exchange Commission. Actual results, including, without limitation, actual sales results, if any, or the application of funds, may differ from those set forth in the forward-looking statements. These forward-looking statements involve certain risks and uncertainties that are subject to change based on various factors (many of which are beyond the Companya™s control). The Company undertakes no obligation to publicly update forward-looking statements, whether because of new information, future events or otherwise, except as required by law.