OREANDA-NEWS. Cancer Genetics, Inc., an emerging leader in molecular and biomarker-based cancer diagnostics, announced today financial and operating results for the second quarter ended June 30, 2016 and provided other company and business updates.

Total revenues were $7.0 million in the second quarter of 2016 and included $4.2 million from Biopharma services and $2.5 million from Clinical services, compared with total revenue of $4.2 million in the second quarter of 2015, an increase of 67 percent.

Panna Sharma, Cancer Genetics CEO and President commented, “Our growth and performance during the second quarter was strong and our impact on the oncology community continued to accelerate as a result of our biopharma contracts and our emphasis on providing disease-focused, and clinically actionable genomic as well as immune-marker data and testing capabilities. This along with our innovative portfolio and global infrastructure is truly unique to CGI and a cornerstone of our future growth.”

Other key financial results and highlights for the quarter ended June 30, 2016 include:

  • Revenues were $7.0 million, a 67% increase over the second quarter of 2015 and a 15% sequential increase over Q1 2016 revenues of $6.1 million;     
  • Revenue from Biopharma Services was $4.2 million, a 58% increase over the second quarter of 2015 and a 26% sequential increase over Q1 2016 revenues of $3.3 million;
  • Revenue from Clinical Services was $2.5 million, a 103% increase over Q2 2015 and a 4% sequential increase over Q1 2016.
  • Revenue from Discovery Services was $0.2 million, compared to $0.3 million over the same period of 2015 and essentially flat over Q1 2016.
  • Gross profit margins improved to 39% a significant improvement from 26% in Q2 2015 and a sequential increase from 32% during Q1 2016.
  • The Company’s organic growth rate was 18% over Q2 2015 and 27% over Q1 2016
  • Q2 2016 Clinical Services test volume increased 8% to 7,153 over 6,608 during Q1 2016
  • Signed contracts for expected future revenue with biotech and pharmaceutical companies increased to over $47 million, a sequential increase of over $6 million from Q1 2016
  • Total expenses for the quarter were $11.0 million, a reduction of 2.2% from $11.3 million during Q1 2016 largely driven by streamlining workflow across sites and reductions in staff.
  • Total cash at the end of the quarter was $10.6 million.

For the second quarter ended June 30, 2016, Cancer Genetics reported a net loss of $4.0 million or $0.28 per diluted share, as compared with a net loss of $5.0 million or $0.51 per diluted share during the same period of 2015, and $5.3 million or $0.39 per diluted share for the first quarter of 2016. This is an improvement in net income of 20% year over year and 23% during sequential quarters.

Panna Sharma commented, “Our growth areas of immuno-oncology and biopharma partnerships continue to advance our market-share. This is clearly reflected in our Biopharma Services revenue, which comprised 60% of the revenue for the quarter. Additionally, our portfolio of unique and disease-targeted next-generation sequencing (NGS) panels, immune markers, and cell-free DNA capabilities is advancing quickly. Our unmatched and industry-leading portfolio is helping CGI secure collaborations with leading institutions, and revenue-generating relationships with biotech and pharma companies that are working on targeted therapeutics, immuno-oncology targets and companion diagnostics, all of which are leading precursors for future growth and revenue for CGI.”

During the second quarter of 2016, Cancer Genetics also made significant advancements in the development of cell-free or liquid biopsy based genomic tests. The Company expects to launch focused, multi-gene, liquid biopsy tests for lung cancer and renal cancer in the upcoming quarters. Cancer Genetics is also currently involved in a three-way collaboration with Huntsman Cancer Institute at University of Utah and Pfizer in the validation of the Company’s multi-gene signature for determination of renal cancer sub-types that can aid in patient management as well as therapy selection in renal cancer. Additionally, the Company is developing a focused multi-gene assay that can aid in comprehensive diagnosis, monitoring, and therapy selection, including the identification of resistance mutations for non-small cell lung cancer (NSCLC).

Recent Corporate Highlights

  • Launched a proprietary comprehensive next-generation sequencing (NGS) panel FOCUS::Lymphoma(TM) with CLIA validation to apply in both clinical care and in trials being performed by biotech and pharmaceutical companies
  • Biopharmaceutical company, H3 Biomedicine Inc. (H3), a leading company in cancer genomics based drug discovery, selected CGI to provide clinical biomarker services for H3’s lead oncology drug candidate H3B-8800, the first ever gene-splicing oncology drug 
  • CGI and Sayre Therapeutics entered into a distribution agreement to commercialize the FDA-cleared Tissue of Origin test throughout India and South Asia
  • The Company announced the offering of multiple FDA-approved PD-L1 tests, including those by DAKO and VENTANA for lung cancer and urothelial cancer, respectively
  • CGI announced results at ASCO with HTG, Keck School of Medicine at USC, and Japan Clinical Cancer Research Organization of using immune-related genes to identify sub-types of patients associated with clinical outcome in metastatic colorectal cancer
  • CGI’s poster highlighting the actionable, clinical value of the FDA-cleared Tissue of Origin test was accepted for presentation at USCAP
  • During Q2 of 2016 CGI brought the total number of immuno-oncology trials that it is providing testing and validation services for to 20, which is up significantly from 12 during the first quarter of 2016
  • Added healthcare industry-veteran John "Jay" Roberts as COO and EVP of Finance

“CGI has a unique platform of capabilities, content and people that are focused on delivering innovation in precision medicine and oncology,” said Jay Roberts, EVP of Finance and COO at Cancer Genetics. “The next phase of our growth will be highly focused on margin expansion and further refining the integration across our sites. This dual focus on innovation and execution will create a durable leader in precision medicine and differentiate us in the marketplace."

ABOUT CANCER GENETICS
Cancer Genetics Inc. is a leader in enabling precision medicine in oncology from bench to bedside through the use of oncology biomarkers and molecular testing. CGI is developing a global footprint with locations in the US, India and China. We have established strong clinical research collaborations with major cancer centers such as Memorial Sloan Kettering, The Cleveland Clinic, Mayo Clinic, Keck School of Medicine at USC and the National Cancer Institute.