Form 8-K CANCER GENETICS, INC For: May 10

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May 10, 2016 4:08 PM EDT
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 10, 2016

CANCER GENETICS, INC.
(Exact Name of Registrant as Specified in its Charter)
 
 
 
 
 
 
Delaware  
 001-35817 
   04-3462475
 
 
(State or Other
(Commission
 (IRS Employer
 
 
   Jurisdiction of
    File Number)
 Identification No.)
 
 
  Incorporation)
 
 
 
 
 
 
 
 
201 Route 17 North 2nd Floor, Rutherford, New Jersey 07070
(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code (201) 528-9200

____________________________________________________________
(Former name or former address, if changed since last report)



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





.

Item 2.02. Results of Operations and Financial Condition.

On May 10, 2016, Cancer Genetics, Inc. (the “Registrant”) issued a press release regarding financial results for the fiscal quarter ended March 31, 2016 and posted a slide presentation to its website, which it may refer to during its conference call to discuss the results. A copy of the press release and slide presentation are furnished as Exhibit 99.1 and Exhibit 99.2, respectively, hereto and are incorporated by reference herein.

Forward-Looking Statements

This report, including Exhibit 99.1 and Exhibit 99.2 furnished herewith, contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements typically are identified by use of terms such as “may,” “will,” “should,” “plan,” “expect,” “anticipate,” “estimate” and similar words, and the opposites of such words, although some forward-looking statements are expressed differently. Forward-looking statements involve known and unknown risks and uncertainties that exist in the Registrant’s operations and business environment, which may be beyond the Registrant’s control, and which may cause actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. For example, forward-looking statements include, without limitation: statements regarding prospects for additional customers; market forecasts; projections of earnings, revenues, synergies, accretion or other financial information; and plans, strategies and objectives of management for future operations. The risks and uncertainties referred to above include, but are not limited to, risks detailed from time to time in the Registrant’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2015 and other reports filed with the SEC. These risks could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Registrant. Forward-looking statements represent the judgment of management of the Registrant regarding future events. Although the Registrant believes that the expectations reflected in such forward-looking statements are reasonable at the time that they are made, the Registrant can give no assurance that such expectations will prove to be correct. Unless otherwise required by applicable law, the Registrant assumes no obligation to update any forward-looking statements, and expressly disclaims any obligation to do so, whether as a result of new information, future events or otherwise.

Item 7.01 Regulation FD.

The slide presentation referred to in Item 2.02 above is attached hereto as Exhibit 99.2 and incorporated herein by reference.

The information in Item 2.02 and Item 7.01 of this Current Report on Form 8-K (including Exhibit 99.1 and Exhibit 99.2) attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

-2-


Item 9.01. Financial Statements and Exhibits.

(d)    Exhibits

As described above, the following exhibits are furnished as part of this report:

Exhibit 99.1 – Press release, dated May 10, 2016.

Exhibit 99.2 – Slide presentation for Q1 2016 earnings call.
    





SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



CANCER GENETICS, INC.


By: /s/ Edward J. Sitar        
Name: Edward J. Sitar
Title: Chief Financial Officer

    
Date:    May 10, 2016



-3-

Cancer Genetics, Inc. Announces 39% Revenue Increase and Provides Recent
Company Highlights

•
Company reports record quarterly revenues of $6.1 million, an increase of 39% over Q1 2015 and 11% over Q4 2015
•
Significant expansion of new Immuno-Oncology (IO) test offering, with expansion into 12 active IO focused clinical trials with leading global companies
•
Signed contracts for expected future revenues with biotech and pharma companies increases to over $41 million
•
Cancer Genetics to host conference call today, Tuesday, May 10, 2016, at 5:00 pm Eastern Time / 2:00 pm Pacific Time

RUTHERFORD, N.J., May 10, 2016 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, 2016.

Financial results and highlights for the quarter ended March 31, 2016 include:

Financial Highlights:
•
Total revenues were $6.1 million, $3.3 million from Biopharma Services, $2.5 million from Clinical services and $0.3 million from Discovery Services - a total increase of 39% over Q1 2015 revenues of $4.4 million, and 11% sequentially over Q4 2015.

•
Total Clinical Services test volumes were 6,608 for the quarter which represented the first full quarter of operations after the acquisition of Response Genetics.

•
Signed contracts for expected future Biopharma Services revenue in connection with clinical trials increased significantly to over $41 million, an increase of 37% or $11 million over Q1 2015, and a sequential increase of over $4 million from Q4 2015.

•
Gross profit margins improved to 32% or $2.0 million, an improvement from 28% or $0.7 million over Q1 2015, and a 19% sequential increase from 13% or $0.7 million during Q4 2015.

•
Total expenses for the quarter were $11.3 million, a reduction of 11% from $12.7 million during Q4 2015 largely driven by reduction in employees in both COGS and SG&A as the Company entered into a phased plan to rationalize workgroups and streamline operations across sites.

•
Total costs for SG&A improved during Q1 2016 by 17% over Q4 2015 - from $6.8 million to $5.6 million while COGS during Q1 2016 were $4.1 million, an improvement of 14% from $4.8 million during Q4 2015 largely driven by headcount reduction at the CGI Los Angeles facility.

“Our company has focused aggressively on two critical items, 1) the final phase of integration of Response Genetics, and 2) on developing new business contracts - both clinical and biopharma - with partners that will be essential to helping both long-term growth and margin expansion,” said Panna Sharma, CEO & President of Cancer Genetics, Inc. “Our company’s solid growth, coupled with our


industry leading capabilities in providing both genomic and immune marker data positions CGI in a central position to the be partner of choice in delivering precision medicine for oncology”.

Recent Corporate Highlights:
•
Developed an industry-leading, unique offering in immuno-oncology testing, immune monitoring and immune profiling using multiple technologies including genomics, immunohistochemistry (IHC), transcriptomics, and immuno-phenotyping that has been optimized for multiple cancer types in both blood cancers and solid tumors.

•
Closed contracts and agreements for 12 IO trials and validations across both the CGI East and West facilities in multiple tumor types including head and neck, ovarian, lung, melanoma and lymphomas that are generating revenue and will continue ramping up throughout 2016 and 2017.

•
Finalized the licensing and commercialization agreement with Oncospire Genomics and Mayo Clinic for the market introduction of a next-generation based sequencing (NGS) panel for Multiple Myeloma which has been launched for usage in clinical trials for biotech and pharma companies and will be launched during Q2 for routine clinical usage.

•
Launched a joint development and NGS panel validation initiative in Kidney Cancer with the Huntsman Cancer Center Institute, Dr. Neeraj Agarwal, the Director of the Genitourinary Program at University of Utah and Pfizer to validate CGI’s NGS panel for the prediction of patient response to Sunitinib® in Kidney Cancer and the development of a cell-free DNA assay to assess treatment response and monitor disease progression.

•
Launched the FDA-approved PD-L1 companion and complementary IHC-based diagnostic biomarker for both clinical usage and biopharma trials.

•
Expanded The ALCHEMIST lung cancer trial with the National Cancer Institute and pharma sponsors to include PD-L1 as part of the comprehensive profiling for all patients, which is being managed and delivered from our Solid Tumor Center of Excellence at CGI West.

•
Launched an industry-leading, clinically-actionable and focused NGS panel for solid tumors that can offer molecular profiling for lung, colorectal, breast, skin, and other solid tumors - CGI FOCUS::Oncomine. This panel is being actively used in a global, open-label, basket trial to identify specific genomic aberrations across a diverse range of tumors.

•
Initiated a large-scale clinical study with a global biopharma company that leverages CGI’s proprietary CLL and Lymphoma NGS panels to help subtype patients and aid in molecular characterization of patients with B-cell cancers.

•
Expanded overall footprint of reimbursement agreements with payers and third-party insurers to now cover over 29 payers and 180 million lives across commercial, BlueCross BlueShield, Medicare advantage and Medicaid plans.

“The future of precision medicine in oncology will increasingly need the integration of leading edge knowledge from multiple disciplines such as genomics, immunology and transcriptomics to build a more comprehensive profile of patients, populations and disease progression. CGI is very unique in our ability to provide real solutions grounded in innovative research that are substantially fragmented in the broader


marketplace,” 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 team’s efforts in Immuno-Oncology will drive substantial increases in both community testing and clinical trial participation throughout the remainder of 2016 and well into 2017 which leads the company towards its goal of profitability.”

Revenue increased 39% to $6.1 million for the three months ended March 31, 2016, from $4.4 million for the three months ended March 31, 2015. Revenue from Biopharma Services, representing 55% of our total revenue totaled $3.3 million in the first quarter of 2016.  Revenue from Clinical Services customers, representing 40% of our total revenue, increased 181%, or $1.6 million, to $2.5 million in the first quarter of 2016. This increase is the result of the acquisition of Response Genetics.   Discovery Services contributed $262 thousand of revenue during the quarter. Total cash at March 31, 2016 was $13.3 million.

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 Details
The Company will conduct a conference call today, Tuesday, May 10th at 5:00 p.m. Eastern Time to discuss its financial performance for the 2016 first quarter and other business activities, including matters related to future performance. Details for the conference call and webcast are noted below, and replays will be made available thru May 24, 2016.

Tuesday, May 10th @ 5:00pm Eastern Time
Domestic:            877-397-0286
International:            719-325-4749
Conference ID:        2482123
Webcast:            http://public.viavid.com/index.php?id=119530

Replays Available through May 24th
Domestic:            877-870-5176
International:            858-384-5517
Replay PIN:            2482123

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.

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.

For more information, please visit or follow us:
Internet: http://www.cancergenetics.com


Twitter: @Cancer_Genetics
Facebook: www.facebook.com/CancerGenetics

Forward Looking Statements
This press release may contain 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 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 Cancer Genetics, Inc. Form 10-K for the year ended December 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, Inc. disclaims any obligation to update these forward-looking statements.

Contact:
Panna Sharma
CEO & President                        
Cancer Genetics, Inc.
201-528-9200



Cancer Genetics, Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
(in thousands, except per share amounts)
 
Three Months Ended March 31,
 
 
2016
 
2015
Revenue
$
6,068
 
 
 
$
4,370
 
 
Cost of revenues
4,103
 
 
 
3,141
 
 
              Gross profit
1,965
 
 
 
1,229
 
 
Operating expenses:
 
 
 
 
 
       Research and development
1,532
 
 
 
1,278
 
 
       General and administrative
4,318
 
 
 
2,987
 
 
       Sales and marketing
1,298
 
 
 
1,116
 
 
              Total operating expenses
7,148
 
 
 
5,381
 
 
              Loss from operations
(5,183
)
 
 
(4,152
)
 
Other income (expense):
 
 
 
 
 
       Interest expense
(126
)
 
 
(34
)
 
       Interest income
4
 
 
 
13
 
 
       Change in fair value of acquisition note payable
34
 
 
 
(90
)
 
       Change in fair value of warrant liability
17
 
 
 
(15
)
 
              Total other (expense)
(71
)
 
 
(126
)
 
              Net (loss)
$
(5,254
)
 
 
$
(4,278
)
 
Basic net (loss) per share
$
(0.39
)
 
 
$
(0.44
)
 
Diluted net (loss) per share
$
(0.39
)
 
 
$
(0.44
)
 
Basic Weighted-Average Shares Outstanding
13,547
 
 
 
9,704
 
 
Diluted Weighted-Average Shares Outstanding
13,547
 
 
 
9,704
 
 

























Cancer Genetics, Inc. and Subsidiaries
Consolidated Balance Sheets (Unaudited)
(in thousands, except par value)
 
March 31,
2016
 
December 31,
 2015
ASSETS
 
 
 
CURRENT ASSETS
 
 
 
       Cash and cash equivalents
$
13,273

 
 
$
19,459

 
       Accounts receivable, net of allowance for doubtful accounts
8,449
 
 
 
6,621
 
 
       Other current assets
1,823
 
 
 
2,118
 
 
               Total current assets
23,545
 
 
 
28,198
 
 
FIXED ASSETS, net of accumulated depreciation
5,870
 
 
 
6,069
 
 
OTHER ASSETS
 
 
 
       Restricted cash
300
 
 
 
300
 
 
       Patents and other intangible assets, net of accumulated amortization
1,679
 
 
 
1,727
 
 
       Investment in joint venture
329
 
 
 
341
 
 
       Goodwill
12,029
 
 
 
12,029
 
 
       Other
217
 
 
 
220
 
 
               Total other assets
14,554
 
 
 
14,617
 
 
Total Assets
$
43,969

 
 
$
48,884

 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
CURRENT LIABILITIES
 
 
 
       Accounts payable and accrued expenses
$
7,775

 
 
$
7,579

 
       Obligations under capital leases, current portion
106
 
 
 
122
 
 
       Deferred revenue
630
 
 
 
831
 
 
       Bank term note, current portion
1,833
 
 
 
1,333
 
 
                Total current liabilities
10,344
 
 
 
9,865
 
 
Obligations under capital leases
251
 
 
 
276
 
 
Deferred rent payable and other
309
 
 
 
315
 
 
Warrant liability
—
 
 
 
17
 
 
Deferred revenue, long-term
622
 
 
 
752
 
 
Bank term note
4,146
 
 
 
4,642
 
 
Total liabilities
15,672
 
 
 
15,867
 
 
STOCKHOLDERS’ EQUITY
 
 
 
       Preferred stock, authorized 9,764 shares, $0.0001 par value, none issued
—
 
 
 
—
 
 
       Common stock, authorized 100,000 shares, $0.0001 par value, 13,652
 
 
 
 
 
       and 13,652 shares issued and outstanding at March 31, 2016 and December
 
 
 
 
 
       31, 2015, respectively
1
 
 
 
1
 
 
       Additional paid-in capital
131,701
 
 
 
131,167
 
 
       Accumulated (deficit)
(103,405
)
 
 
(98,151
)
 
Total Stockholders’ Equity
28,297
 
 
 
33,017
 
 
Total Liabilities and Stockholders’ Equity
$
43,969

 
 
$
48,884

 









Cancer Genetics, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
 
Three Months Ended March 31,
 
2016
 
2015
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
       Net (loss)
$
(5,254
)
 
 
$
(4,278
)
 
       Adjustments to reconcile net (loss) to net cash (used in) operating activities:
 
 
 
             Depreciation
518
 
 
 
348
 
 
             Amortization
87
 
 
 
9
 
 
             Provision for bad debts
—
 
 
 
221
 
 
             Stock-based compensation
534
 
 
 
696
 
 
             Change in fair value of acquisition note payable
(34
)
 
 
90
 
 
             Change in fair value of Gentris contingent consideration
—
 
 
 
(162
)
 
             Change in fair value of warrant liability
(17
)
 
 
15
 
 
             Amortization of debt issuance costs
4
 
 
 
—
 
 
             Loss in equity method investment
12
 
 
 
207
 
 
             Changes in:
 
 
 
                      Accounts receivable
(1,828
)
 
 
(17
)
 
                      Other current assets
295
 
 
 
23
 
 
                      Other non-current assets
3
 
 
 
—
 
 
                      Accounts payable, accrued expenses and deferred revenue
(101
)
 
 
(239
)
 
                      Deferred rent and other
(6
)
 
 
(18
)
 
                             Net cash (used in) operating activities
(5,787
)
 
 
(3,105
)
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
        Purchase of fixed assets
(319
)
 
 
(83
)
 
        Patent costs
(39
)
 
 
(40
)
 
                             Net cash (used in) investing activities
(358
)
 
 
(123
)
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
        Principal payments on capital lease obligations
(41
)
 
 
(14
)
 
                             Net cash (used in) financing activities
(41
)
 
 
(14
)
 
                             Net (decrease) in cash and cash equivalents
(6,186
)
 
 
(3,242
)
 
CASH AND CASH EQUIVALENTS
 
 
 
        Beginning
19,459
 
 
 
25,554
 
 
        Ending
$
13,273

 
 
$
22,312

 
 
 
 
 
 
 
 
 
SUPPLEMENTAL CASH FLOW DISCLOSURE
 
 
 
        Cash paid for interest
$
97

 
 
$
34

 




May 10, 2016 Q1 2016 Earnings Call Nasdaq (CGIX) THE ONCOLOGY DIAGNOSTICS PARTNER FROM BENCH TO BEDSIDE

 
Cancer Genetics, Inc. | NASDAQ: CGIX | Q1 2016 Earnings Call Forward-Looking Statements 2 These slides may contain 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 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 Cancer Genetics, Inc. Forms 10-K for the year ended December 31, 2015 and 10-Q for the quarter ended March 31, 2016 along with other filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof. Cancer Genetics, Inc. disclaims any obligation to update these forward-looking statements.

 
EVERYTHING WE DO AT CGI IS FOCUSED ON ONE KEY IDEA… …DELIVER INNOVATION & PATIENT VALUE BY PROVIDING THE MOST COMPREHENSIVE CAPABILITIES IN ONCOLOGY DIAGNOSTICS & PRECISION MEDICINE

 
Cancer Genetics, Inc. | NASDAQ: CGIX | Q1 2016 Earnings Call Large, Global Market Opportunities $458B GLOBAL ONCOLOGY SPEND BY 2030 Global Footprint Created by Highly Strategic M&A 3 TRANSFORMATIVE ACQUISITIONS IN 2014 & 2015 Strong & Growing Partnerships with Leading BioPharma CONTRACTS WITH 8 of 10 TOP BIOPHARMA +650% INC. WITH BIOPHARMA(1) CUSTOMERS 2012-2015 Innovation Engine & Expertise Driven By Key Collaborations 15 RESEARCH COLLABORATIONS WITH LEADING INSTITUTIONS Unique, Proprietary Portfolio of Genomic Tests & Panels 11 COMMERCIALLY LAUNCHED TESTS 49 US PATENTS AND 100+ FOREIGN PATENTS Diversified & High Growth Revenue Streams 77% Revenue Growth 2014-2015 | 40% 3-YEAR CAGR World-Class Management Team 100+ CUMULATIVE YEARS OF EXPERIENCE Investor Highlights: Cancer Genetics Addresses the Trends in Oncology from Bench to Bedside (1) In signed contracts & potential revenue 4

 
Cancer Genetics, Inc. | NASDAQ: CGIX | Q1 2016 Earnings Call 1st Quarter 2016 Revenue Highlights 39% REVENUE GROWTHFROM Q1 2015 Q1 TOTAL REVENUE GREW FROM $4.4M TO 2015 2016 $1.4 $4.4 $6.1 $6M $4M $2M 3-Year CAGR 63.3% Q 1 2 0 1 4 Q 1 2 0 1 5 Q 1 2 0 1 6 5

 
Cancer Genetics, Inc. | NASDAQ: CGIX | Q1 2016 Earnings Call Revenues By Category 6 BIOPHARMA SERVICES CLINICAL SERVICES DISCOVERY SERVICES 76% 20% 4%Q1 2015 $4.4 Mn  245% increase in clinical test volume over Q1 2015 due to Response acquisition and launch of PD-L1 testing  Launch of comprehensive immuno-oncology portfolio  Focus on next-generation sequencing services through CG India  Establishing new preferred partnerships, new projects and synergies involving solid tumor and hematological cancers  Over 50 new projects closed $3.3 Mn $2.5 Mn $0.3 Mn 55% 41% 4% Q1 2016 $6.1 Mn

 
Cancer Genetics, Inc. | NASDAQ: CGIX | Q1 2016 Earnings Call Q1 2016 Trends 7  Validation and launch of comprehensive immuno-oncology portfolio including PD-L1 IHC testing across CGI.  Completed clinical validation and launched into a revenue-generating clinical trial utilizing Focus::Oncomine™, a solid tumor NGS panel.  Negotiated and executed over 60 new contracts and project extensions for biopharma testing throughout the CGI network.  $4+ million in biopharma contracts closed during Q1 2016; contracts will deliver future revenue during 2016-17.  Total Q1 2016 clinical services test count reached over 6,600 tests, an increase of 245% over Q1 2015.

 
Cancer Genetics, Inc. | NASDAQ: CGIX | Q1 2016 Earnings Call Q1 2016 Collaboration Highlights 8  In 2016, CGI is realizing results from several of its research collaborations with leading academic and research institutions. Huntsman Cancer Institute at University of Utah & Pfizer Dr. Neeraj Argawal Validation of CGI’s NGS-based kidney cancer panel, which includes a signature for the prediction of response to Sunitinib®, and the development of cell-free DNA assay for disease monitoring Keck School of Medicine of USC Dr. Imran Siddiqi Engaging large biotech companies in studies that profile immune response and genomic profiling of patients in Lymphoma National Cancer Institute The ALCHEMIST Lung Cancer Trial PD-L1 included as part of the comprehensive profiling for the ongoing ALCHEMIST lung cancer trial  CGI’s relationships with top academic institutions and investment in oncology testing innovation are driving new revenue.

 
Cancer Genetics, Inc. | NASDAQ: CGIX | Q1 2016 Earnings Call Q1 2016 Financial Highlights: Revenue 9  Revenues were $6.1 million, a 39% increase over Q1 2015 revenues of $4.4 million, and 11% sequentially over Q4 2015.  Revenue from Biopharma Services grew 14% ; Clinical Services increased by 3 %; and Discovery Services grew 11 % sequentially over Q4 2015.  Gross profit margins improved to 32% an improvement from 28% in Q1 2015 and a significant increase from 13% during Q4 2015.  Total cash was $13.3 million.

 
Cancer Genetics, Inc. | NASDAQ: CGIX | Q1 2016 Earnings Call Q1 2016 Financial Highlights: Expenses 10  Expenses for the quarter were $11.3 million, an 11% improvement over Q4 2015 expenses of $12.7 million.  COGS was $4.1 million, a 14% improvement over Q4 2015 and was driven by a reduction in headcount, reduced expenses in use of lab supplies and improved synergies in logistics and shipping costs.  G&A expenses were $4.3 million, a 14% improvement over Q4 2015.  S&M expenses were $1.3 million, a 25% improvement over Q4 2015.  R&D expenses were $1.5 million, a 33% increase over Q4 2015 as a result of developing the immuno-oncology offering across both clinical sites.  One-time costs, including severance-related items, were ~$225 K.  Operating loss for Q1 2016 was $5.18 million, and net loss was $5.25 million.

 
Cancer Genetics, Inc. | NASDAQ: CGIX | Q1 2016 Earnings Call Summary Statement of Operations 11 Income Statement Item ($ in Thousands) Q1 2015 Q4 2015 Q1 2016 Revenue $4,370 $5,484 $6,068 Gross Profit 1,229 728 1,965 Gross Margin (%) 28% 13% 32% Research & Development (R&D) 1,278 1,148 1,532 Sales & Marketing (S&M) 1,116 1,726 1,298 General & Administrative (G&A) 2,987 5,031 4,318 Operating Profit (Loss) (4,152) (7,177) (5,183) Net Income (Loss) (4,278) (5,714) (5,254) Balance Sheet Information ($ in Thousands) Actual 03/31/16 Cash $13,273 Stockholders’ Equity 28,297

 
THE ONCOLOGY DIAGNOSTICS PARTNER FROM BENCH TO BEDSIDE WWW.CGIX.COM WWW.CANCERGENETICS.COM CGI Headquarters 201 Route 17 North Rutherford, NJ 07070 Phone: +1 201-528-9200 Fax: +1 201-528-9235 RUTHERFORD, NJ Research Triangle Park 133 Southcenter Court Morrisville, NC 27569 Phone: +1 919-465-0100 Fax: +1 919-465-0554 RALEIGH, NC LOS ANGELES, CA 1640 Marengo Street Fourth Floor Los Angeles, CA 90033 Phone: +1 323-224-3900 Fax: +1 323-224-3096 #3-1-135/1A CNR Complex Mallapur Main Road, R.R. Dst. Hyderabad – 500 076, Telangana Toll-free: +91 040-2717-8178 Fax: +91 040-2717-8176 HYDERABAD, INDIA 781 Cai Lun Road, Room 803 Shanghai 201203 P.R. China Toll-free: +91 040-2717-8178 Fax: +91 040-2717-8176 SHANGHAI, CHINA

 

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