Rosetta Genomics, a Leader in MicroRNA-based Diagnostics and Therapeutics Reports First Quarter 2007 Financial Results; Liver Cancer Therapeutics and Metastasis Classifier Diagnostic Projects Show Significant Progress

May 08, 2007, 01:00 ET from Rosetta Genomics Ltd

    REHOVOT, Israel, May 8 /PRNewswire-FirstCall/ -- Rosetta Genomics, Ltd.
 (Nasdaq:   ROSG), a leader in microRNA-based diagnostics and therapeutics,
 reported today its consolidated financial results for the quarter ended
 March 31, 2007 and business highlights.
     "We are seeing constant and significant progress in both our diagnostic
 and therapeutic programs," said Amir Avniel, President and Chief Executive
 Officer of Rosetta Genomics. "Our newly developed protocol for extraction
 of microRNAs from blood serum demonstrates the considerable promise of our
 technology. This proprietary extraction protocol is a critical milestone
 towards successfully developing early detection tests based on a simple
 blood draw. The ongoing progress in both our lead diagnostic program for
 cancer of unknown primary and lead therapeutic program for liver cancer,
 are very encouraging signs for the remainder of 2007."
     Net Loss
     The net loss for the first quarter of 2007 was $2 million, or $0.23 per
 ordinary share, as compared to $1.5 million, or $0.57 per ordinary share,
 in the first quarter of 2006. Non-cash stock-based compensation charges for
 the first quarter of 2007 included $205,000 compared to $92,000 in the
 first quarter of 2006. The Company's accumulated deficit during the
 development stage totaled $22.8 million for the period from March 9, 2000
 (date of inception) to March 31, 2007.
     Research and Development Expenses
     Research and development remained the company's largest expense and
 accounted for 52 % and 60% of our operating expenses in the quarters ended
 March 31, 2007 and 2006, respectively. Research and development expenses
 were $1.2 million in the first quarter of 2007, including $66,000 of
 non-cash stock-based compensation, as compared to research and development
 expenses of $886,000 in the first quarter of 2006, which included $52,000
 of non-cash stock-based compensation. This increase resulted primarily from
 an increase in purchasing of tissue samples and other research related
 materials as we made progress in our Cancer of Unknown Primary (CUP)
 diagnostic program as well as an increase in costs relating to our
 intellectual property and costs associated with license fees.
     Marketing and Business Development Expenses
     Marketing and business development expenses were $375,000 in the first
 quarter of 2007, including $31,000 of non-cash stock-based compensation, as
 compared to $387,000 in the first quarter of 2006.
     General and Administrative Expenses
     General and administrative expenses were $680,000 in the first quarter
 of 2007, including $108,000 of non-cash stock-based compensation, as
 compared to $211,000 in the first quarter of 2006 which included $40,000 of
 non-cash stock-based compensation. This increase resulted primarily from
 legal and other professional fees associated with completion of our initial
 public offering and operation as a public company.
     Financial Income (expenses), Net
     Net financial income was $200,000 in the first quarter of 2007, as
 compared to net financial income of $33,000 in the first quarter of 2006.
 Financial income is derived primarily from interest income on bank deposits
 and realized income from marketable securities.
     Cash, Cash Equivalents, Short term Bank Deposit and Marketable
     On March 31, 2007, we had cash, cash equivalents, short term bank
 deposit and marketable securities of $36.3 million, compared to $10.8
 million on December 31, 2006 and $4.4 million on March 31, 2006. We
 received approximately $26 million in net proceeds from our initial public
 offering of 4,312,500 shares in March 2007 and net proceeds of $13.8
 million from a private placement early in 2006 and from the exercise of
 warrants in 2006.
     Recent Highlights
     Rosetta Genomics presented the following diagnostic and therapeutic
 developments at Cambridge Healthtech Institute's MicroRNA in Human and
 Disease and Development Conference on March 29-31, 2007 and at the Annual
 Meeting of the American Association for Cancer Research (AACR) on April 17,
     Diagnostic Program
     - The lead diagnostic program for Cancer of Unknown Primary (CUP)
 expanded from 14 microRNAs to include 19 microRNAs, which we believe are
 sufficient to potentially identify 15 tumor types, with 85% accuracy. In
 addition, CUP related results showed that a single microRNA may distinguish
 between subtypes of cancers for example the difference between
 adenocarcinomas and squamous cell carcinomas.
     MicroRNA Extraction Protocol from Blood Serum
     - A proprietary microRNA extraction protocol from blood serum was
 developed, which enables the detection of microRNAs in blood serum in a
 robust and sensitive manner. The protocol showed no significant loss of
 artificial microRNA spiked-in during the extraction and consistency over
 time in the level of microRNAs.
     Therapeutic Program
     - The lead therapeutic program for liver cancer (HCC) being conducted
 in collaboration with Isis Pharmaceuticals identified four potential
 microRNA targets that when inhibited lead to a decrease in proliferation of
 liver cancer cell-lines
     Conference Call Information
     Rosetta Genomics will host a conference call at 4:30 p.m. ET on May 8,
 2007 to discuss first quarter activities and recent corporate developments.
 The call may be accessed by dialing U.S. Toll Free (866)-409-1557 or
 International 1-(913)-312 1237 and providing the passcode 3026948.
     A replay of the call will be available until May 15, 2007. To access
 the replay, please dial (888)-203-1112 (domestic) or 1-(719)-457-0820
 (international). The replay passcode is 3026948.
     A live audio webcast of the call will also be available on the
 "Investors" section of the company's website, An
 archived webcast will be available on the Company's website approximately
 two hours after the event, and will be archived for 45 days thereafter.
     About MicroRNAs
     MicroRNAs (miRNAs) are a recently discovered, naturally occurring RNAi.
 These small RNAs act as protein regulators and have the potential to form
 the basis for a new class of diagnostics and therapeutics. Since many
 diseases are caused by the abnormal activity of proteins, the ability to
 selectively regulate protein activity through microRNAs could provide the
 means to treat a wide range of human diseases. In addition, microRNAs have
 been shown to have different expression levels in certain diseased versus
 normal tissues. As a result, these differences potentially provide for a
 novel diagnostic strategy for many diseases. MicroRNAs are thought to play
 a key role in the differentiation of cells into specific cell types
 performing various functions in the body.
     About Rosetta Genomics
     Rosetta Genomics (Nasdaq:   ROSG) is a leader in the development of
 microRNA-based diagnostics and therapeutics. Founded in 2000, the company's
 integrative research platform combining bioinformatics and state-of-the-art
 laboratory processes has led to the discovery of hundreds of biologically
 validated novel human microRNAs. Building on its strong IP position and
 strategic alliances with leading biotechnology companies, Rosetta Genomics
 is working to develop a full range of diagnostic and therapeutic products
 based on microRNAs. The company's primary focus is in the development of
 microRNA-based products to diagnose and treat different forms of cancer and
 infectious diseases.
     Forward-Looking Statement Disclaimer
     Various statements in this release concerning Rosetta's future
 expectations, plans and prospects, including without limitation, statements
 relating to the role of miRNAs in human physiology and disease, the
 potential of microRNAs in the diagnosis and treatment of disease, and the
 possible identification of a novel diagnostics approach for targeting
 miRNAs, constitute forward-looking statements for the purposes of the safe
 harbor provisions under The Private Securities Litigation Reform Act of
 1995. Actual results may differ materially from those indicated by these
 forward-looking statements as a result of various important factors,
 including risks related to: Rosetta's approach to discover and develop
 novel diagnostics products, which is unproven and may never lead to
 marketable products; Rosetta's ability to fund and the results of further
 pre-clinical and clinical trials; obtaining, maintaining and protecting
 intellectual property utilized by Rosetta's products; Rosetta's ability to
 enforce its patents against infringers and to defend its patent portfolio
 against challenges from third parties; Rosetta's ability to obtain
 additional funding to support its business activities; Rosetta's dependence
 on third parties for development, manufacture, marketing, sales, and
 distribution of products; the successful development of Rosetta's product
 candidates, all of which are in early stages of development; obtaining
 regulatory approval for products; competition from others using technology
 similar to Rosetta's and others developing products for similar uses;
 Rosetta's dependence on collaborators; and Rosetta's short operating
 history; as well as those risks more fully discussed in the "Risk Factors"
 section of Rosetta's most recent Registration Statement on Form F-1 on file
 with the Securities and Exchange Commission. In addition, any
 forward-looking statements represent Rosetta's views only as of today and
 should not be relied upon as representing its views as of any subsequent
 date. Rosetta does not assume any obligation to update any forward-looking
 statements unless required by law.
          U.S. dollars in thousands (except share and per share data)
                                                    Three months ended
                                                          March 31
                                                     2007          2006
     Operating expenses::
     Research and development, net               $      1,161    $        886
     Marketing and business development                   375             387
     General and administrative                           680             211
     Operating loss.........                            2,216           1,484
     Financial income, net.....                          (200)            (33)
     Net loss..............                      $      2,016    $      1,451
     Basic and diluted net loss per Ordinary
     share                                       $       0.23    $       0.57
     Weighted average number of Ordinary
     shares used to compute basic and diluted
     net loss per Ordinary share                    8,874,841       2,548,765
     Pro forma basic and diluted net loss per
     share                                                       $       0.26
     Weighted average number of shares used to
     compute basic and diluted pro forma net
     loss per shares                                                5,626,229
                           CONSOLIDATED BALANCE SHEETS
                            U.S. dollars in thousands
                                                      March 31,   December 31,
                                                        2007         2006
     ASSETS                                          Unaudited
     Cash and cash
     equivalents..............................    $     10,776     $    5,228
     Short-term bank deposits.................           5,214          5,149
     Marketable securities....................          20,292            386
     Other accounts receivable and prepaid
     expenses.............                                 329            134
     Deferred issuance costs..................               -          1,787
     Total current assets...............                36,611         12,684
     SEVERANCE PAY FUND.......................             111             98
     PROPERTY AND EQUIPMENT, NET                           519            461
     Total assets.......................          $     37,241     $   13,243
     Short-term bank loan, current maturities of
     capital lease and of long-term loan          $         39     $       48
     Trade payables.............................           547            745
     Deferred revenue........................              228            228
     Other accounts payable and accruals                   718            750
     Total current liabilities............               1,532          1,771
     Long-term bank loan and capital lease                  22             29
     Accrued severance pay ..........                      361            344
     Total Long-term Liabilities.......                    383            373
     Share capital:.............................            27             17
     Additional paid-in capital.......                  58,166         31,958
     Other comprehensive income...                          16              3
     Deferred stock-based compensation...........          (36)           (48)
     Deficit accumulated during the development
     stage...........                                  (22,847)       (20,831)
     Total shareholders' equity...                      35,326         11,099
     Total liabilities and shareholders' equity.  $     37,241     $   13,243
     Media & Investors
     Ron Kamienchick
     T: +972-8-948-4785

SOURCE Rosetta Genomics Ltd