EX-99.1 2 a2015q1exhibit991-pressrel.htm EXHIBIT 99.1 a2015q1Exhibit991-PressRelease


Cancer Genetics Announces Strong First Quarter 2015 Results

Company Reports Record Quarterly Revenues of $4.4 million, an Increase of 206% vs. First Quarter 2014
Next-Generation Sequencing (NGS) Panels Rapidly Progress into Usage by Both Clinical and Biopharma Customers 
Cancer Genetics to Host Conference Call Today, Tuesday, May 12th, at 8:30am Eastern Time (ET)/5:30am Pacific

RUTHERFORD, N.J., May 12, 2015, Cancer Genetics, Inc. (Nasdaq: CGIX), an emerging leader in DNA-based cancer diagnostics, announced today financial and operating results for the first quarter ended March 31, 2015.

Financial results and highlights for the first quarter 2015, ended March 31, 2015, include:

Financial Highlights:
Revenues were $4.4 million, a 206% increase over 1Q 2014 revenues of $1.4 million, and 8% sequentially over Q4 2014;
BioPharma services revenue grew 578% year-over-year to $3.3 million, and 20% sequentially over Q4 2014;
Signed contracts for expected future Biopharma revenue in connection with currently proposed clinical trials increased significantly to over $30 million from $25 million at year end 2014;
Gross profit margins improved to 28.1% or $1.2 million, an improvement from 9.8% or $0.1 over 1Q 2014, and a sequential increase of 5% over Q4 2014;
Total cash was at $28.3 million, including the cash that became unrestricted after refinancing of a bank line which was recently closed

“We continue to make strong progress in driving market adoption, revenue growth, and developing a unique, unrivaled portfolio of genomic capabilities in oncology,” said Panna Sharma, CEO & President of Cancer Genetics, Inc. “We are pleased with the continued acceleration of our business and revenue with our biopharma partners, and in the rapid adoption of our NGS panels and genomic knowledge into active
clinical trials.”

Recent Corporate Highlights
Launched multiple, next-generation based sequencing panels for improved and cost-effective patient management
Focus::Myeloid™, a NGS panel for myeloid cancer patients, which affects over 275,000 patients in the U.S.
Focus::Hotspot™, a NGS panel targeting the five most common solid tumors: breast, colorectal, lung, skin, and ovarian, for customers throughout Asia
Focus::CLL™, a targeted NGS panel for Chronic Lymphocytic Leukemia, was selected for use in a global clinical trial by a leading biotechnology company and helped to drive revenue and volume growth through the quarter
Received New York State licensure for FHACT®, our unique product for cervical cancer diagnosis and management, allowing CGI to market the test to gynecologists, oncologists, and women’s health centers serving more than 7.6 million women in New York State
Received licensure from the California Department of Health, allowing CGI to provide its state-of-the art oncology testing services for patient samples from the state of California





Signed Agreement with America’s Choice Provider Network®; CGI’s full range of oncology focused testing services are now available to an additional 19 million individuals in the U.S.
CGI’s ExpandDX™, a digitally enabled collaborative testing platform for community hospitals, is being rolled out into hospital systems and clinical laboratories

“The substantial momentum our business gained in 2014 continues well into 2015 as we reach significant milestones of our bench to bedside strategy,” said Panna Sharma. “The global infrastructure and unique business model we’ve developed through strategic acquisitions has positioned us for diversified growth and unparalleled access to the oncology community. This has allowed us to develop a durable platform from which to commercialize our oncology programs. Our new locations in North Carolina and India are driving an increase in the number of clinical partnerships we secure and in the number of patient lives we can affect. The critical genomic and biomarker information provided by our proprietary tests for some of the most common forms of cancer continues to differentiate us in the marketplace, and furthers our position as the oncology diagnostics partner of choice.”

Revenue increased 206% to $4.4 million for the three months ended March 31, 2015, from $1.4 million for the three months ended March 31, 2014, as a result of a $2.2 million in revenue contribution from acquisitions and an increase of $839 thousand in CGI’s SelectOne offering.

Revenue from Biopharma Services, representing 76% of our total revenue, increased 578%, or $2.8 million, to $3.3 million in the first quarter of 2015, from $491 thousand in the same period of 2014, principally due to increases in SelectOne volumes and revenue from acquisitions.  Revenue from Clinical Services customers, representing 20% of our total revenue, decreased 7%, or $66 thousand, to $873 thousand in the first quarter of 2015, from $939 thousand in the first quarter of 2014. This decrease was driven by continued pricing pressure from Medicare and private insurance companies.  To address this challenge, the company adjusted clinical sales efforts to focus more on customers that have greater profitability and more need for CGI’s proprietary portfolio. Lastly, revenue from Discovery Services, a new line of business that offers testing services to public and private research organizations and discovery groups, represented $166 thousand during the quarter.

Gross profit margins improved significantly to 28.1% for the three months ending March 31, 2015, from 9.8%, during the same period last year. Gross profits of $1.2 million, up from $0.1 during Q1 2014, were largely driven by improved utilization across sites and better use of CGI capacity. CGI reported a net loss of $4.3 million, or ($0.44) per share in the first quarter of 2015, compared to a net loss of $2.5 million, or ($0.27) per share in the first quarter of 2014.

Total cash at March 31, 2015 was $28.6 million and includes the amount restricted for the Company’s loan facility with Wells Fargo. This restriction has been released with the refinancing of the Company’s debt facility. The Company had unrestricted cash and cash equivalents of $22.3 million as of March 31, 2015, as compared to $25.6 million as of December 31, 2014.

On May 7, 2015, the Company entered into a new debt financing facility with Silicon Valley Bank to refinance the Company’s cash collateralized loan from Wells Fargo and to provide additional working capital lines of credit. The Silicon Valley loan provides for a $6 million term note ("Term Note"), and a line of credit ("Line of Credit") of up to $4 million. Pursuant to the new loan agreement, the Company will no longer be required to maintain restricted cash accounts.

CGI will also be providing slides with an overview of the results and discussion points; they will be available at http://ir.cancergenetics.com/presentations.






Conference Call & Webcast
Tuesday, May 12, 2015 at 8:30 a.m. Eastern Time/5:30 a.m. Pacific Time
Domestic:            877-407-4018
International:            201-689-8471
Conference ID:        13606598
Webcast:             http://public.viavid.com/player/index.php?id=113931

Replays - Available through May 26, 2015
Domestic:            877-870-5176
International:            858-384-5517
Conference ID:        13606598


About Cancer Genetics, Inc.
Cancer Genetics Inc. is an emerging leader in DNA-based cancer diagnostics, servicing some of the most prestigious medical institutions in the world. Our tests target cancers that are difficult to diagnose and predict treatment outcomes. These cancers include hematological, urogenital and HPV-associated cancers. We also offer a comprehensive range of non-proprietary oncology-focused tests and laboratory services that provide critical genomic information to healthcare professionals, as well as biopharma and biotech companies. Our state-of-the-art reference labs are focused entirely on maintaining clinical excellence and are both CLIA certified and CAP accredited and have the appropriate licensure from several states including New York State.

We have established strong research collaborations with major cancer centers such as Memorial Sloan-Kettering, The Cleveland Clinic, Mayo Clinic and the National Cancer Institute.

For more information, please visit or follow us:
Internet: www.cancergenetics.com
Twitter: @Cancer_Genetics
Facebook: www.facebook.com/CancerGenetics

Forward Looking Statements: This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements pertaining to future financial and/or operating results, future growth in research, technology, clinical development and potential opportunities for Cancer Genetics, Inc. products and services, along with other statements about the future expectations, beliefs, goals, plans, or prospects expressed by management constitute forward-looking statements. Any statements that are not historical fact (including, but not limited to, statements that contain words such as "will," "believes," "plans," "anticipates," "expects," "estimates") should also be considered to be forward-looking statements. Forward-looking statements involve risks and uncertainties, including, without limitation, risks inherent in the development and/or commercialization of potential products, risks of cancellation of customer contracts or discontinuance or delays of trials, risks that anticipated benefits from acquisitions will not be realized, uncertainty in the results of clinical trials or regulatory approvals, need and ability to obtain future capital, maintenance of intellectual property rights and other risks discussed in the Company's Forms 10-K for the year ended December 31, 2014 and 10-Q for the quarter ended March 31, 2015 along with other filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof. Cancer Genetics disclaims any obligation to update these forward-looking statements.


CONTACTS





Investor Relations                Media Relations
Hans Vitzthum                Marie Patrone-Michellod
LifeSci Advisors, LLC            Cancer Genetics, Inc.
212-915-2568                    201-528-9182
marie.michellod@cgix.com

















































Cancer Genetics, Inc. and Subsidiaries
Consolidated Balance Sheets (Unaudited)
 
March 31,
 2015
 
December 31,
 2014
ASSETS
 
 
 
CURRENT ASSETS
 
 
 
       Cash and cash equivalents
$
22,311,730

 
 
$
25,554,064

 
       Accounts receivable, net of allowance for doubtful accounts
4,824,394
 
 
 
5,028,620
 
 
       Other current assets
1,149,428
 
 
 
1,172,750
 
 
               Total current assets
28,285,552
 
 
 
31,755,434
 
 
FIXED ASSETS, net of accumulated depreciation
4,045,565
 
 
 
4,310,126
 
 
OTHER ASSETS
 
 
 
       Restricted cash
6,300,000
 
 
 
6,300,000
 
 
       Patents
534,101
 
 
 
502,767
 
 
       Investment in joint venture
840,286
 
 
 
1,047,744
 
 
       Goodwill
3,187,495
 
 
 
3,187,495
 
 
       Security deposits
1,564
 
 
 
1,564
 
 
               Total other assets
10,863,446
 
 
 
11,039,570
 
 
Total Assets
$
43,194,563

 
 
$
47,105,130

 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
CURRENT LIABILITIES
 
 
 
       Accounts payable and accrued expenses
$
3,753,224

 
 
$
3,762,567

 
       Obligations under capital leases, current portion
59,652
 
 
 
58,950
 
 
       Deferred revenue
267,396
 
 
 
544,446
 
 
                Total current liabilities
4,080,272
 
 
 
4,365,963
 
 
Obligations under capital leases
285,188
 
 
 
300,385
 
 
Deferred rent payable
330,125
 
 
 
347,840
 
 
Line of credit
6,000,000
 
 
 
6,000,000
 
 
Warrant liability
67,000
 
 
 
52,000
 
 
Acquisition note payable
634,394
 
 
 
560,341
 
 
Deferred revenue, long-term
825,787
 
 
 
924,850
 
 
Total liabilities
12,222,766
 
 
 
12,551,379
 
 
STOCKHOLDERS’ EQUITY
 
 
 
       Preferred stock, authorized 9,764,000 shares, $0.0001 par value, none issued
 
 
 
 
 
       Common stock, authorized 100,000,000 shares, $0.0001 par value, 9,831,169
 
 
 
 
 
       and 9,821,169 shares issued and outstanding at March 31, 2015 and
 
 
 
 
 
       December 31, 2014, respectively
982
 
 
 
982
 
 
       Additional paid-in capital
113,216,621
 
 
 
112,520,268
 
 
       Accumulated (deficit)
(82,245,806
)
 
 
(77,967,499
)
 
Total Stockholders’ Equity
30,971,797
 
 
 
34,553,751
 
 
Total Liabilities and Stockholders’ Equity
$
43,194,563

 
 
$
47,105,130

 









Cancer Genetics, Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
 
Three Months Ended March 31,
 
2015
 
2014
Revenue
$
4,370,327

 
 
$
1,430,375

 
Cost of revenues
3,141,735
 
 
 
1,290,062
 
 
              Gross profit
1,228,592
 
 
 
140,313
 
 
Operating expenses:
 
 
 
       Research and development
1,277,926
 
 
 
596,771
 
 
       General and administrative
2,986,897
 
 
 
2,731,404
 
 
       Sales and marketing
1,115,813
 
 
 
748,979
 
 
              Total operating expenses
5,380,636
 
 
 
4,077,154
 
 
              Loss from operations
(4,152,044
)
 
 
(3,936,841
)
 
Other income (expense):
 
 
 
       Interest expense
(33,967
)
 
 
(341,177
)
 
       Interest income
12,618
 
 
 
22,184
 
 
       Change in fair value of acquisition note payable
(89,914
)
 
 
 
 
       Change in fair value of warrant liability
(15,000
)
 
 
(44,000
)
 
              Total other (expense)
(126,263
)
 
 
(362,993
)
 
              Loss before income taxes
(4,278,307
)
 
 
(4,299,834
)
 
Income tax provision (benefit)
 
 
 
(1,813,941
)
 
              Net (loss)
$
(4,278,307
)
 
 
$
(2,485,893
)
 
Basic net (loss) per share
$
(0.44
)
 
 
$
(0.27
)
 
Diluted net (loss) per share
$
(0.44
)
 
 
$
(0.27
)
 
Basic Weighted Average Shares Outstanding
9,703,576
 
 
 
9,276,643
 
 
Diluted Weighted Average Shares Outstanding
9,703,576
 
 
 
9,276,643
 
 































Cancer Genetics, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
 
Three Months Ended March 31,
 
2015
 
2014
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
       Net (loss)
$
(4,278,307
)
 
 
$
(2,485,893
)
 
       Adjustments to reconcile net (loss) to net cash (used in) operating activities:
 
 
 
             Depreciation
347,710
 
 
 
96,800
 
 
             Amortization
8,725
 
 
 
6,702
 
 
             Provision for bad debts
221,395
 
 
 
 
 
             Equity-based consulting and compensation expenses
696,353
 
 
 
530,122
 
 
             Change in fair value of acquisition note payable
89,914
 
 
 
 
 
             Change in fair value of Gentris contingent consideration
(162,000
)
 
 
 
 
             Change in fair value of warrant liability
15,000
 
 
 
44,000
 
 
             Amortization of loan guarantee and financing fees
 
 
 
310,500
 
 
             Deferred rent
(17,715
)
 
 
(3,210
)
 
             Loss in equity method investment
207,458
 
 
 
11,755
 
 
             Change in working capital components:
 
 
 
                      Accounts receivable
(17,169
)
 
 
(251,057
)
 
                      Other current assets
23,322
 
 
 
(64,844
)
 
                      Accounts payable, accrued expenses and deferred revenue
(239,317
)
 
 
(131,799
)
 
                             Net cash (used in) operating activities
(3,104,631
)
 
 
(1,936,924
)
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
        Purchase of fixed assets
(83,149
)
 
 
(144,018
)
 
        Increase in restricted cash
 
 
 
(6,000,000
)
 
        Patent costs
(40,059
)
 
 
(36,809
)
 
                             Net cash (used in) investing activities
(123,208
)
 
 
(6,180,827
)
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
        Principal payments on capital lease obligations
(14,495
)
 
 
(7,490
)
 
        Proceeds from warrant exercises
 
 
 
950
 
 
        Proceeds from option exercises
 
 
 
2,020
 
 
        Principal payments on notes payable
 
 
 
(22,298
)
 
                             Net cash (used in) financing activities
(14,495
)
 
 
(26,818
)
 
                             Net (decrease) in cash and cash equivalents
(3,242,334
)
 
 
(8,144,569
)
 
CASH AND CASH EQUIVALENTS
 
 
 
        Beginning
25,554,064
 
 
 
49,459,564
 
 
        Ending
$
22,311,730

 
 
$
41,314,995

 
SUPPLEMENTAL CASH FLOW DISCLOSURE
 
 
 
        Cash paid for interest
$
33,940

 
 
$
30,677

 
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES
 
 
 
        Cashless exercise of derivative warrants
 
 
 
125,000