Company also signed on Avatao to market miRNA-based diagnostics in China and Taiwan.

Rosetta Genomics says that it will restructure operations next month, eliminating 35 jobs and shifting resources toward growing sales of its miRNA-based diagnostics in the U.S. Separately, the company inked a deal with Avatao Biotech to bolster sales in China.

The company projects that the planned restructuring will enable it to shrink its cash burn by 50% and cut expenses by about $4.2 million annually. The firms says that it has sent termination notices to 24 employees and will do the same with another 11 staffers who were “primarily in research and development and general and administrative functions in Israel” as soon as it can provide termination notices under Israeli employment laws.

“With the recent launch of our U.S. oncology sales force, our emphasis has shifted from research and development to product commercialization,” states Kenneth A. Berlin, president and CEO of Rosetta Genomics. “We have begun to see a significant increase in demand for our tests since the launch of our dedicated oncology sales team. As expected, there is the usual lag between generating demand and getting paid for these tests by the applicable payors for these tests. We recently submitted our first claims to payors.”

“Furthermore, we expect that our sales and marketing efforts will continue to show additional commercial progress in the coming quarters, and subject to obtaining adequate additional financing, we hope to be able to build on these efforts with expanding product introductions and additional sales representatives,” Berlin said. “Moving forward, our restructured research and development efforts will focus on advancing our blood-based microRNA diagnostics, specifically in heart failure, as well as on certain projects for potential partnerships that would provide the company with additional cash infusions.”

Rosetta’s currently marketed products include miRview® mets2, mets, lung, squamous, meso, and kidney. Berlin expects the firm’s partnership with asbestos claims administration PACE Claims Services will begin gaining sales momentum through its miRview meso diagnostic test, which differentiates mesothelioma from carcinomas in the lung or pleura.

Rosetta Genomics’ license agreement with Avatao Biotech inked today gives the latter exclusive rights to market Rosetta Genomics’ miRview mets and miRview mets2 tests in China including Hong Kong as well as Taiwan and Macau. “Expanding into these Asian markets is a key element of our globalization strategy and offers tremendous growth opportunities,” Berlin notes.

Avatao will also have exclusive rights to market one additional Rosetta Genomics product in China, which will be selected by Avatao within a year. Rosetta will receive up-front payments and fees tied to regulatory and commercial milestones, all totalling over $8 million. The company will also earn royalties based on net sales.

Avatao will occupy about 1,500 square meters of the 4,500 square meters of offices and lab space occupied by the Kunshan microRNA Institute, for the first phase of the collaboration project. The facility will serve as the central laboratory for analyzing and processing cancer tissue samples for CUP (cancer of unknown primary) patients from major cancer centers across China.

Avatao is also building a laboratory at the Kunshan microRNA Institute & Biomed Park. The additional 30,000 square-meter space under construction will reportedly host the largest siRNA facility in China to cover biology, chemistry, formulation, as well as animal models and toxicity studies.

In the U.S., Rosetta Genomics estimates that approximately 200,000 patients a year may benefit from the miRview mets and miRview mets2 test. Another 60,000 benefit from miRview squamous, 60,000 from miRview meso, and more than 1 million patients worldwide from miRview lung, the company adds.

The miRview tests are designed to identify the primary tumor site in metastatic cancer and CUP. miRview squamous identifies the squamous subtype of non-small-cell lung cancer, while miRview meso diagnoses mesothelioma, and miRview lung identifies the four main subtypes of lung cancer using small amounts of tumor cells. The tests are offered directly by Rosetta Genomics in the U.S. and through distributors around the globe.

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