Rosetta Genomics Ltd. (Nasdaq:ROSG) has a market cap of just $3.7 million, but it has chalked up fundraising successes in the past few months. The company is now holding a secondary offering of 5.5 million shares at $5 per share, for total gross proceeds of $27.5 million, not including the underwriter's over allotment option. The offering is scheduled to close on Wednesday.
Since April, Rosetta has raised $10 million in three public offerings at steadily rising prices to $11 per share in May, seven times its share price at the time. The share price has since dropped sharply, including 5.2% yesterday to $4.52.
Aegis Capital Corporation has been the sole underwriter for all the offerings. Adv. Oded Har-Even, the managing partner of Zysman Aharoni & Gayer LLP's New York affiliate Sullivan & Worcester LLP, which represents Aegis, told "Globes" that the pricing of the latest offering means that investors are already lined up, ahead of the closing.
Rosetta Genomics develops cancer diagnostic kits based on micro-RNA molecular tests. The company raised $30 million in its 2007 IPO, and its first kit was approved for marketing in 2008. But subsequent problems have prevented the company from taking off. It bought a laboratory to expedite marketing approval of its kits, but then sold it, and established a laboratory of its own. It also signed and subsequently cancelled a marketing agreement with Prometheus Laboratories Inc., and later settled the legal dispute between them.
In early 2012, Rosetta was on the verge of being delisted from Nasdaq. It had $730,000 in cash and $1.75 million in debts, at which point it successfully began raising capital in secondary offerings. The company's business improved at the same time. The latest deal with Precision Therapeutics Inc., in late July, is for diagnostic kits for the accurate identification of the tumor of origin in Cancers of unknown or uncertain primary.
To keep investors' interest, Rosetta will now have to show strong sales growth of its diagnostic kits in the coming quarters, from the current level of only a few hundred thousand dollars a year.
Published by Globes [online], Israel business news - www.globes-online.com - on August 7, 2012
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