Response Genetics first-quarter total revenue up 140%

Response Genetics Inc. (Nasdaq:RGDX), a company focused on the development and sale of molecular diagnostic tests for cancer, today announced its consolidated financial results for the three months ended March 31, 2010.

“Since March of 2008, when we first started selling ResponseDX™ genetic tests, we have analyzed tumors from approximately 8,000 patients. We are proud that we are having a meaningful impact on the lives of such a large number of people affected by cancer”

"Since March of 2008, when we first started selling ResponseDX™ genetic tests, we have analyzed tumors from approximately 8,000 patients. We are proud that we are having a meaningful impact on the lives of such a large number of people affected by cancer," said Kathleen Danenberg, Response Genetics president and CEO.

First Quarter Corporate Development Highlights

• ResponseDX™ Test Sales Continue to Ramp - Sales of ResponseDX™ genetic tests continue to show strong growth quarter over quarter. For the first quarter of 2010, the total number of tests ordered increased by 24 percent to 2,023, compared to 1,634 for the last quarter of 2009. After record revenue of $1.7 million in the fourth quarter of 2009 from Response DX™ test sales, the Company maintained momentum in the first quarter of 2010 and posted the same revenue amount. The Company continues to record revenues primarily on a cash basis from certain insurance providers until collection patterns are better determined. Cash associated with the majority of the tests processed during the first quarter of 2010 is expected to be collected in the second quarter of 2010.
• Agreement with GlaxoSmithKline - In March 2010, Response Genetics signed a non-exclusive license with GlaxoSmithKline LLC (GSK). Under the terms of the agreement, GSK gains certain rights to Response Genetics' proprietary PCR analysis technology and diagnostic expertise to assess BRAF gene mutations in human tumor samples. Payments will be made to Response Genetics upon achievement of agreed-to milestones.

First Quarter 2010 Results

Total revenue increased by 140 percent to $ 3.7 million for the first quarter ended March 31, 2010, compared to $1.5 million for the same period last year. The increase was primarily due to increase in ResponseDX™ revenues. Revenue from our ResponseDX™ genetic tests increased by 554 percent to $1.72 million for the first quarter, compared to $263 thousand for the same period in 2009. Our pharmaceutical client revenue increased 17 percent to $1.4 million, compared to $1.2 million in the first quarter of 2009.

Cost of revenue for the first quarter ended March 31, 2010 was $2.1 million, compared with $1.3 million for the same period ended 2009. Research and development expenses were $ 0.6 million for the first quarter of 2010, compared with $0.6 million for the same period in the prior year. General and administrative expenses were $1.7 million for the first quarter, compared with $1.7 million for the same period in 2009. Total operating expenses for the first quarter were $5.8 million, compared with $4.8 million for the same period last year. The primary reasons for the increase in total operating expenses are an increase in Cost of revenue corresponding to the increase in revenue and to costs related to the continued expansion of the sales force.

Response Genetics' net loss for the first quarter ended March 31, 2010 was $2.1 million or a loss of $0.13 per share, compared with a net loss of $3.3 million, or a loss of $0.30 per share, for the same period last year.

Cash and Cash Equivalents

Cash and cash equivalents at March 31, 2010, were $9.1 million, compared to $7.1 million at December 31, 2009. As previously announced, on March 5, 2010 Response Genetics completed a private placement of approximately 3 million newly issued common shares at a per-share price of $1.31. The Company received net proceeds of $3,879,403 million from this private placement.