Cancer Genetics Issues Letter to Shareholders
Published on: Wednesday, January 16th, 2019 View all Press Releases
RUTHERFORD, N.J., Jan. 16, 2019 (GLOBE NEWSWIRE) — Cancer Genetics, Inc. (Nasdaq: CGIX), a leader in enabling precision medicine for immuno-oncology and genomic medicine through molecular markers and diagnostics, today published a letter to shareholders from its Chief Executive Officer, Jay Roberts.
Happy New Year – we are pleased to provide an update on our activities and strategic development. We believe that 2018 was an important time for re-assessing our corporate direction, consolidating our company operations and focusing our capabilities in our biopharma business to execute our restructuring, while focusing on revenue growth and accelerating our path to profitability. We believe that the re-positioning initiatives we have undertaken over the last few months will support our efforts to achieve near-term success.
We continue to work with Raymond James & Associates, Inc. to complete a strategic transaction with the goal of enhancing shareholder value. We are making positive strides in this regard, and anticipate announcing the results of our efforts in Q1 2019.
We carried out a number of steps to improve our performance and accelerate the path to profitability through the execution of our transformation plans. First, we completed the sale of our operations in India, for $1.85 million in cash. Second, the operations from our LA lab facility were consolidated successfully into New Jersey and North Carolina, on time and within budget. We incurred approximately $2.15 million in restructuring charges during the first three quarters of 2018, and as a result, we reduced our annualized costs by over $4 million and expect to see the results of these actions beginning with our 4th quarter results and beyond. We are now focusing our efforts on streamlining and optimizing lab operations in our New Jersey facility. We believe that this step will enable us to improve our overall efficiency and continue to reduce our overall operating costs. We continue to expand our efforts on our biopharma and preclinical services business. We intend to focus our efforts in our clinical services business on high performing tests that have strong demand and favorable reimbursement which we believe will increase our profitability. We expect to report quarterly sequential revenue growth and operating cost reductions for Q4 2018.
WE CONSUMMATED SEVERAL NEW AGREEMENTS
We launched Thermo Fisher Scientific’s next-generation sequencing (NGS) Oncomine™ Comprehensive Assay v3 to drive clinical trial opportunities with key channel partners. The new version of this assay delivers superior tumor profiling capabilities that can generate results to assist researchers in decision making. We entered a manufacturing and supply agreement with AGILENT for our custom probe that is used in the Company’s proprietary FISH-based HPV-Associated Cancer Test (FHACT) and expect to license the probes through domestic and international distribution channels. We also negotiated a partnership with Cellaria, a scientific innovator that develops revolutionary new cancer models. Additionally, we consummated an exclusive distribution agreement with Genecast Biotechnology to market, distribute and sell the Tissue of Origin® (TOO) Test in China. The TOO test is a microarray-based gene expression test that analyzes a tumor’s genomic information to help identify its origin, which is valuable in classifying metastatic, poorly differentiated, or undifferentiated cancers. We believe these agreements will contribute to our biopharma business and generate future revenue beginning in Q1 2019.
We also strengthened our management team with the appointment of Glenn Miles as the Chief Financial Officer and Michael McCartney as the Chief Commercial Officer. Glenn brings valuable financial and accounting leadership experience, which will help us execute on our transformation strategy and build a foundation for sustainable growth and profitability. Michael is responsible for developing and overseeing Cancer Genetics’ commercial strategy and spearheading the Company’s business development initiatives. We have successfully secured new contracts with the potential to generate approximately $32 million in biopharma revenues in the coming 2 to 3 years. We believe both Glenn and Michael will help expand our business and accelerate our path to profitability.
We are extremely grateful to you, our loyal shareholders, for your support as we execute our strategic initiatives and advance our capabilities in the precision oncology space. We will continue to keep you informed of our progress and remain optimistic about our future.
Chief Executive Officer
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, Australia 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.
The Company offers a comprehensive range of laboratory services that provide critical genomic and biomarker information. Its state-of-the-art reference labs are CLIA-certified and CAP-accredited in the US and have licensure from several states including New York State.