Response Genetics, Inc. Reports First Quarter 2008 Financial Results

Business Wire,  May 15, 2008  

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LOS ANGELES -- Response Genetics, Inc. (NASDAQ: RGDX), a company focused on the development and commercialization of molecular diagnostic tests for cancer, today announced its consolidated financial results for the three months ended March 31, 2008.

"These results, coupled with our expansion of the ResponseDX: Lung[TM] and ResponseDX: Colon[TM] test offerings illustrate the company's commitment to meeting the operational goals we have set forth," said Kathleen Danenberg, CEO and President of Response Genetics, Inc. "We are very encouraged by the positive responses we've had with the controlled launch of ResponseDX: Lung[TM] and ResponseDX: Colon[TM] and look forward to expanding our diagnostic pipeline."

Financial Results for Three Months Ended March 31, 2008

Total revenue increased by 18 percent, to $1.9 million, in the three months ended March 31, 2008, compared with $1.6 million in the same period last year. This increase was primarily generated by the Company's existing pharmaceutical contracts related to pharmacogenomic testing services and the introduction of new testing services being offered by Response Genetics to its pharmaceutical clients.

Cost of revenue for the three months ended March 31, 2008, was $919,000, compared with $823,000 for the same three months ended in 2007. Research and development expenses were $603,000 for the three months ended March 31, 2008, compared with $320,000 for the same period in the prior year. General and administrative expenses were $2.3 million for the three months ended March 31, 2008, compared with $1.3 million for the same period in 2007. Total operating expenses for the three months ended March 31, 2008, increased to $3.8 million, compared with $2.4 million for the same period last year. The increases in operating expenses were primarily due to: (1) non-cash, stock-based compensation to employees and new personnel to support the Company's growth, which totaled approximately $320,000; (2) operating costs related to the startup and continuing operation of the European laboratory, which totaled approximately $565,000; (3) initial marketing costs associated with the launch of ResponseDX: Lung[TM] and ResponseDX: Colon[TM], which totaled $230,000; and (4) increases in maintaining the Company's intellectual property portfolio, costs associated with being a public company and additional depreciation on fixed asset purchases, which all totaled approximately $240,000.

Response Genetics' net loss for the three months ended March 31, 2008, was $1,725,000, or $0.17 per share, compared with a net loss of $992,000, or $0.36 per share, for the three months ended March 31, 2007.

Cash and Cash Equivalents

Cash and cash equivalents at March 31, 2008, were $17.5 million, compared with $17.0 million at December 31, 2007. Working capital was $15.6 million.

Clinical Highlights

In March 2008, Response Genetics, Inc. expanded its test offerings to include ResponseDX: Lung[TM] (ERCC1 gene expression, RRM1 gene expression, KRAS mutation analysis, EGFR amplification) and ResponseDX: Colon[TM] (ERCC1 gene expression, KRAS mutation analysis, TS gene expression). Both are PCR-based tests that help guide therapeutic treatment decisions in patients with non-small cell lung cancer (NSCLC) and colorectal cancer (CRC). All of the Company's tests can be performed on a single formalin-fixed, paraffin-embedded (FFPE) tumor tissue sample, eliminating the need for additional tumor samples. ResponseDX: Lung[TM] and ResponseDX: Colon[TM] are currently available to prequalified institutions and practice groups through Response Genetics' CLIA-registered laboratory.

As platinum-based therapies are standard care for about 500,000 newly diagnosed cancer patients per year in the United States, Response Genetics, Inc. is validating the use of single gene tests in additional tumor types in a variety of cancers.

About Response Genetics, Inc.

Response Genetics, Inc. ("RGI"; the "Company") (NASDAQ: RGDX) is engaged in the research and development of pharmacogenomic cancer diagnostic tests based on its proprietary and patented technologies. RGI's technologies enable extraction and analysis of genetic information from genes derived from tumor samples stored as formalin-fixed and paraffin-embedded specimens. RGI currently generates revenue primarily 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, Calif. 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 Company's plans, objectives, projections, expectations and intentions, such as the ability of the Company to analyze cancer samples, the potential for using the results of this research to develop diagnostic tests for cancer, the usefulness of genetic information to tailor treatment to patients, the ability of the Company to make its ResponseDx:Lung[TM] and ResponseDX:Colon[TM] tests available in a number of institutions, and other statements identified by words such as "projects," "may," "could," "would," "should," "believes," "expects," "anticipates," "estimates," "intends," "plans" or similar expressions.