Response Genetics(RGDX) announced a deal today for a non-exclusive license to provide GlaxoSmithKline (GSK) with certain rights to proprietary BRAF mutational analysis technology in human tumor samples. The BRAF gene encodes a protein involved in cell signaling and cellular growth and differentiation.Specific gene mutations have been correlated with the development of certain forms of cancer. Response already provides genetic testing services to GSK and this Agreement will expands the collaboration to the BRAF gene for the development of diagnostic tools for disease prognosis that may aid in treatment decisions. The proprietary PCR tests are all performed in Response Genetics’ CLIA certified laboratory.A core technology of the Company is extraction of genetic material such as RNA and DNA from human tumor specimens fixed and stored in paraffin.
Financial details of the deal were not disclosed. As of midday trading the stock was up 25% to $2.70 on 227,000 shares
Revenues for 2009 were $9.06M up from $7.1M from the previous year. Losses were $9.3M or $0.70/sh. based on 13.3M shares outstanding. Cash was $7.1M at year-end with an additional $4M raised on March 8 with 3M unregistered shares at $1.31. The Company went public on June 5,2007 at $7/share raising $21M with Maxim and Caris as underwriters.
On April 16 , 2010 Ladenburg Thalmann upgraded the stock to a buy.
Last Thursday we published a report in Genetic Engineering News Biomarkers Poised for Breakout Moment summarizing sessions on biomarkers from the 2010 BIO Meeting in Chicago. Many of the scientists commented on the need for genetic testing or biomarkers for targeting cancer therapy. Punctuating this trend will be collaborations between diagnostic and drug firms such as Response Genetics and GlaxoSmithKline.