LOS ANGELES, Aug. 14 Response Genetics, Inc.(Nasdaq: RGDX), today reported financial results for the second quarter endedJune 30, 2007.
"The second quarter of 2007 was very exciting for Response Genetics,beginning with our successful initial public offering in June," said KathleenDanenberg, President and CEO of Response Genetics. "We are very pleased bythe recent developments that have since been announced. During the quarterthese developments include our collaborations with Hitachi Chemical and theUniversity of California, San Francisco, and the publication of clinical datain the Journal of Clinical Oncology that support the use of diagnosticscreening for lung cancer patients. We believe these developments furthervalidate our business strategy of using genetic information to developdiagnostic tests which will help physicians tailor treatment to the individualpatient."
Financial Results for Three Months Ended June 30, 2007
Total revenue increased to $1.5 million in the second quarter of 2007compared to $738,150 in the second quarter of 2006. This increase wasprimarily due to the introduction of new testing services being offered byResponse Genetics to its pharmaceutical clients, and the Company's existingpharmaceutical contracts related to pharmacogenomic testing services.
Cost of revenue for the second quarter of 2007 was $1.2 million, comparedwith $584,230 for the second quarter of 2006. Research and developmentexpenses were $916,793 for the second quarter of 2007, compared with $269,247for the same period in the prior year. General and administrative expenses of$1.9 million for the second quarter of 2007 increased from $659,246 for thesecond quarter of the prior year. The increases in cost of revenue, researchand development, and general and administrative expenses were primarily due to1) stock option grants to employees at the time of the Company's initialpublic offering totaling $1.0 million, 2) Operating costs related to the set-up and continuing operation of the European laboratory totaling $570,000, and3) costs associated with an hiring personnel to support the company's growth,costs involving the new testing services the Company is offering, maintainingthe Company's patent position, and costs related the completion of theCompany's IPO and costs associated with being a public company totaling$880,000. Total operating expenses for the second quarter of 2007 increasedto $4.0 million, compared with $1.5 million for the same period last year.
Response Genetics' net loss for the second quarter of 2007 of $2.5million, or $0.58 per share, compared with $746,962, or $0.36 per share, forthe second quarter of 2006.
Financial Results for Six Months Ended June 30, 2007
Revenues for the first six months of 2007 increased to $3.1 million,compared with $2.0 million for the first six months of 2006. Cost of revenuefor the first six months of 2007 was $2.0 million, compared with $978,130reported for the first six months of 2006. General and administrative expensesfor the first six months of the year were $3.2 million, compared to $1.6million for the comparable period in 2006. Research and development expensesin the first half of 2007 totaled $1.2 million, compared to $595,702 for thecomparable period in 2006. Total operating expenses for the first six monthsof 2007 were $6.4 million, versus $3.2 million for the comparable period in2006. Response Genetics reported a net loss for the six months ended June 30,2007 of $3.2 million, or $1.00 per share, versus a net loss for the comparableperiod in 2006 of $920,552, or $0.51 per share.
Cash and Cash Equivalents
Cash and cash equivalents at June 30, 2007 were $19.4 million compared to$4.9 million at December 31, 2006. On June 8, Response Genetics completed itsinitial public offering of 3,000,000 shares of its common stock at a price of$7.00 per share.