RUTHERFORD, N.J., Oct. 16, 2018 (GLOBE NEWSWIRE) -- Cancer Genetics (Nasdaq: CGIX), a leader in enabling precision medicine for immuno-oncology and genomics through molecular markers and diagnostics, today announced the publication of a letter to shareholders from its Chief Executive Officer Jay Roberts.
Dear Shareholders,
As we approach the last few months of 2018, it is my pleasure to update you on our strategic and operational developments made throughout the year. Since I took on the role as Chief Executive Officer of the Company back in February 2018, we have made several positive advances in execution of our planned strategic direction in terms of our business and operations. We are progressing toward our primary objective of building Cancer Genetics into a leader in the precision oncology space, improving the lives of people battling cancers and creating value for the Company’s stakeholders.
Operational Highlights
As a part of our restructuring and growth strategy, we undertook a number of steps to improve our path to sustainable profitability. First, we sold certain non-performing assets for cash, such as the operations in India, for $1.6 million in cash at closing, with the possibility for up to another $300 thousand conditioned on the business reaching certain revenue target in subsequent months. Second, we have successfully completed the consolidation of the LA lab facility into New Jersey and North Carolina, on time and within budget. We are now taking necessary steps to streamline and optimize the lab operations in our New Jersey facility – primarily through leveraging operating synergies of the combined operations to improve efficiency and continue to reduce our overall operating costs. Third, we are continuing to focus on growing our biopharma and preclinical services business. Finally, we plan to continue to concentrate our efforts in our clinical business on high performing tests with strong demand and favorable reimbursement and payments.
Recently, we signed a definitive agreement to acquire NovellusDx. When the acquisition is approved and other closing conditions satisfied, the transaction is expected to enhance our capabilities in functional genomics, which we believe will drive growth in our preclinical and clinical trial services business. The transaction with NovellusDx aims to combine Cancer Genetics’ scale, expansive test portfolio and broad data set related to cancer biology, with NovellusDx’s proprietary functional genomics technology and machine learning abilities to form a cutting edge oncology-focused precision medicine company. The transaction with NovellusDx includes a bridge loan of up to $2.3 million, and commitments from certain existing NovellusDx shareholders to participate in a PIPE financing upon closing of the transaction, which is expected in Q1 2019.
Business Highlights
Recently, we entered into a partnership with Cellaria, a scientific innovator that develops revolutionary new cancer models. The partnership is focused on deploying our Genomics Center of Excellence to characterize Cellaria’s pipeline of commercial and custom-developed clinical biopharma products based on patient samples. We believe this collaboration will serve as an important catalyst to drive growth in our preclinical and biopharma business, and is complementary to the proposed NovellusDx transaction and recent vivoPharm acquisition competed in 2017.
We also launched Thermo Fisher Scientific’s next-generation sequencing (NGS) Oncomine™ Comprehensive Assay v3 to drive clinical trial opportunities with key channel partners. Thermo Fisher’s launching of the Oncomine™ Comprehensive Assay v3 in our labs demonstrates its confidence in our deep understanding of cancer biology and mutations. This new version of the assay offers superior tumor profiling capabilities that generate reliable results to empower both translational and clinical researchers in decision making.
In an effort to streamline our sales process and grow our biopharma business towards profitability, we strengthened our team with the appointment of Mike McCartney as our Chief Commercial Officer. Mike has strong experience in the life sciences, diagnostic and lab services industry with responsibilities in sales management, global marketing and business development. Under Mike’s leadership, our commercial teams are making remarkable progress with the addition of new biopharma and discovery stage preclinical projects and customers. The new contracts signed in Q3 for biopharma and discovery/preclinical services could amount to up to an estimated $9.7 million in potential revenues over the next 2 to 3 years. We are dedicated to continuing this momentum in our biopharma business and to make further progress in the coming quarters.
We also signed a manufacture and supply agreement with Agilent for our proprietary custom probe that is used in the Company’s proprietary FISH-based HPV-Associated Cancer Test (FHACT). Additionally, we hope to out-license the probes through domestic and international distribution channels, with such licensors having the ability to purchase probes manufactured by Agilent.
I want to thank you for your continued support. We are aligned in our efforts to advance our business and operational development, and we believe that Cancer Genetics’ cutting edge precision medicine tests and services have far-reaching possibilities in the oncology space. We are working diligently to advance the Company and look forward to sharing the details with you in an upcoming business update.
Jay Roberts
Chief Executive Officer
Cancer Genetics
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.
