Erinn Broshko commented: "We are very pleased with the progress made by Precision and are looking forward to our clinically valuable test being available to lung cancer patients. The commercial success of a molecular diagnostic test depends, in large measure, upon the extent of its integration into current pathological processes. The use of GeneFx Lung with RNAlater will allow pathologists to avoid the logistics involved with using flash-frozen tumor specimens and, instead, to handle and ship specimens at room temperature, thereby simplifying the process significantly. We believe that this will materially enhance the commercial prospects of our test."
Update Regarding Litigation with Signal Genetics LLC and Respira Health LLC
On February 25, 2013, MBI provided an update in regard to its ongoing litigation with Signal Genetics LLC and Respira Health LLC.
In February 2011, Signal and Respira filed a lawsuit against MBI and Precision in the Supreme Court of the State of New York asserting twelve causes of action against MBI. MBI continues to believe that the lawsuit is frivolous, vexatious and entirely without merit and is defending the lawsuit vigorously. MBI has received financial support from Precision to, among other things, conduct such defense and to cover any settlement (in both cases, half of which is credited against future royalties that may be owed to MBI by Precision) or award of damages made against MBI (which would not be credited against such future royalties), subject in all cases to certain threshold limits.
Discovery in the lawsuit has been completed and, on August 24, 2012, MBI filed with the Court a motion for partial summary judgment to dismiss Signal and Respira's claims for lost profits arising from alleged breaches of contract and the duty of good faith and fair dealing, and causes of action for negligent misrepresentation, unfair competition and unjust enrichment.
On February 20, 2013, the Court heard oral argument in connection with MBI's motion. In a Decision and Order of the same date, the Court granted MBI's motion and dismissed Signal and Respira's: (1) claims against MBI for lost profit damages arising from alleged breaches of contract and the duty of good faith and fair dealing; (2) cause of action against MBI for negligent misrepresentation; and (3) cause of action against MBI for unfair competition. No trial date has been set with respect to the remaining claims.
Erinn Broshko commented: "This decision is a significant setback for Signal and Respira. We have always believed that the lawsuit is entirely without merit and are confident that we will be successful in having the remaining claims and causes of action dismissed."
2012 Financial Results
MBI incurred a loss of $368,083 ($0.00 per share) for 2012 compared to having net income of $1,530,192 ($0.02 per share) for 2011. MBI did not generate any revenue during 2012, but generated net licensing revenue of $2,069,773 during 2011.
Research and Development
Research and development expenses were $nil for 2012 compared to $94,519 for 2011. Under the terms of MBI's commercialization agreement with Precision, Precision is responsible for all future costs associated with the development and commercialization of GeneFx Lung.
General and Administrative
General and administrative expenses, including non-cash share-based expenses associated with the prior issuance of stock options and foreign exchange, were $368,083 for 2012 compared to $732,216 for 2011, representing a decrease of 50%.
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