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"During the third quarter, Rosetta Genomics experienced significantprogress in the expansion of the Company's diagnostic and therapeuticdevelopment engines, as well as our proprietary microRNA technologies,further strengthening our belief that Rosetta Genomics is a leader in themicroRNA field," said Amir Avniel, President and CEO of Rosetta Genomics."Our first microRNA-based diagnostic test, designed to differentiate squamousfrom non-squamous lung cancers, has successfully passed the prevalidationphase at Columbia University Medical Center, and we expect to launch thisdiagnostic in the first half of 2008. This is the first of three productsRosetta expects to launch in 2008, and we believe these diagnostics willoffer patients and clinicians an effective means to diagnose various types ofcancers."
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"On the therapeutics front, we expect to begin in vivo studies on severalmicroRNA leads in our liver cancer program, being conducted in collaborationwith Isis Pharmaceuticals, and partially funded by the Binational IndustrialResearch and Development (BIRD) Foundation. We believe the interest inmicroRNAs from Pharma and the scientific community will continue to grow, andthe expansion of our diagnostic and therapeutics pipeline, as well as ourleading intellectual property position will assist us to continue and leadthe microRNA revolution."
Cash, Cash Equivalents, Short-term Bank Deposit and Marketable Securitiesand Long-Term Investments
As of September 30, 2007, Rosetta had cash, cash equivalents, short-termbank deposits, marketable securities and long-term investments of $32million, compared to $10.8 million on December 31, 2006. Due to recentdevelopments in the credit market, we have reclassified some of ourmarketable securities, which are all rated AAA, as long term investments.
Net Loss
The net loss for the third quarter of 2007 was $2.2 million, or $0.18 perordinary share, as compared to $2.2 million, or $0.87 per ordinary share, inthe third quarter of 2006. Non-cash stock-based compensation charges for thethird quarter of 2007 were $237,000 compared to $445,000 in the third quarterof 2006. Net loss for the nine months ended September 30, 2007 was $6.4million, or $0.59 per ordinary share, as compared to $5.5 million, or $2.16per ordinary share, in the nine months ended September 30, 2006. Non-cashstock-based compensation charges for the nine months ended September 30, 2007were $724,000 compared to $689,000 in the nine months ended September 30,2006.
Research and Development Expenses
Research and development remained the Company's largest expense andaccounted for 55% and 59% of its operating expenses in the quarters endedSeptember 30, 2007 and 2006, respectively, and 57% and 58% of its operatingexpenses in the nine months ended September 30, 2007 and 2006, respectively.Research and development expenses were $1.4 million in each of the thirdquarter of 2007 and 2006, including $64,000 and $40,000 of non-cashstock-based compensation, respectively. Research and development expenseswere $4.3 million in the nine months ended September 30, 2007, including$197,000 of non-cash stock-based compensation, as compared to $3.4 million inthe nine months ended September 30, 2006, which included $170,000 of non-cashstock-based compensation. The increase for the nine months ended September30, 2007 as compared to the same period in 2006 resulted primarily from thecontinued expansion of Rosetta Genomics' diagnostic programs and an increasein costs related to salaries and expenses associated with the hiring ofadditional research and development personnel, the filing, prosecution andmaintenance
