Angela Qian - LifeSci Advisors Panna Sharma - President & CEO Ed Sitar - Treasurer & CFO

Paul Knight - Janney Montgomery Ben Haynor - Feltl and Company

Good day and welcome to the Cancer Genetics Incorporated First Quarter 2016 Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to, Angela Qian of LifeSci Advisors. Please go ahead.

Thank you, Operator. And thank you for joining us for Cancer Genetics’ first quarter 2016 earnings conference call. On the call today are Company President and Chief Executive Officer, Panna Sharma; and Chief Financial Officer, Ed Sitar. The Company issued a news release this afternoon highlighting the Company's financial results and progress in operations, which is available under the Investor Relations' section of the Company’s Web site. Following the Safe Harbor statement, Panna will provide an overview of the first quarter, including recent events and Company activity. Ed Sitar will then provide a summary of the first quarter financial results. We’ll then open up the call to questions. I’d like to remind everyone that various remarks about future expectations, plans, and prospects constitute forward-looking statements for purposes of Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Cancer Genetics cautions that these forward-looking statements are subject to risks and uncertainties that may cause their actual results to differ materially from those indicated, including risks described in the Company’s filings with the SEC. Any forward-looking statements made on this conference call speak only as of today’s date, Tuesday, May 10, 2016, and Cancer Genetics does not intend to update any of these forward-looking statements to reflect events or circumstances that occur after today’s date. This conference call is being recorded for audio rebroadcast on Cancer Genetics’ Web site at www.cancergenetics.com. All participants on this call will be in listen-only mode. The call will be followed by a question-and-answer session. With that, I’d like to turn the call over to President and CEO, Panna Sharma for his opening comments. Good afternoon, Panna.

Thank you, Angela and thank you everyone for joining us in the call to review our first quarter 2016 earnings call and company highlights. To start, I’d like to provide you with a brief overview of Cancer Genetics, particularly for those of you who may be new to our story or has been following our evolving Company. Cancer Genetics is an emerging leader in providing critical genomic and biomarker information for the personalization of oncology diagnosis, patient management and treatment selection. Our proprietary disease focus and clinically validated genomic panels support the work at many clinical centers, hospitals as well as the precision medicine initiatives and clinical trials of biotechnology and pharmaceutical companies and research organizations. We have a unique and unparalleled global infrastructure for the development and delivery of oncology diagnostics from bench-to-bedside through the state-of-the-art facilities in the U.S., as well as India and China. We currently have research collaborations with 18 leading academic and research centers, including Mayo Clinic, Memorial Sloan Kettering, the National Cancer Institute, Columbia University, Moffitt Cancer Center, the Keck School of Medicine at USC, and the Huntsman Institute at University of Utah to name a few. These collaborations allow us to leverage the vast and rapid innovation going on in oncology, biomarkers and genomic today, and more importantly translate and rapidly validate those insights with real patient data to the turn and use to power our tests and services. This unique access and ability leverage translational oncology programs both generates a significantly differentiator for our shareholders and also for our business partners. Our vision is to be the oncology diagnostics and companion diagnostics partner from bench-to-bedside by combining innovation and execution. This is especially critical today in our industry as the fundamental business of laboratory based genomic and molecular diagnostics is rapidly changing. And we feel that our proprietary technology, our scope and our business model would make us an enduring and clear leader in this industry as it continues to have an impact on patient care and on therapy development. Let me provide you with a few very timely and concrete patient centered examples, where our testing and our collaborative approach have influenced patient care and hopefully patient outcome. Recently we made our Lymphoma NGS panel, next generation sequencing panel which is a very focused panel for the diagnosis and management of B-Cell cancer patients available to our clinical collaborators in advance of the clinical launch. This panel covers the majority of B-Cell cancers in Lymphoma, the largest category at hematologic cancers, and this particular patient was expected of having diffuse large B-Cell Lymphoma. The West Coast’s Hematopathologist that was involved in this care had used of larger scale competitive panel, and there was nothing actionable found this large scale hem panel. And nothing terribly new that can from the -- other than the traditional ISC and Sanger sequencing they had done. They decided to use our panel as part of its collaboration. We ran our focused Lymphoma panel on this sample. And our panel is about 33% smaller meaning more targeted than the competitions. We not only confirmed that this was an aggressive diffuse large B-Cell Lymphoma based on the molecular profile. But we also found a very specific mutation at KMT 2D, this file was not even included in other hem panels that are commercially available. But it's critical in evaluating potential response or lack of response to CD-40 linked drugs this changes the therapy selection and management of this patient. This is why that we believe that this type of disease focused approach coupled with comprehensive capabilities will have the greatest impact on precision medicine and most importantly have the most value for peers and patients overtime. By understanding the disease and having panels that are targeted allows you to have greater depth of knowledge and greater depth of interaction with the clinical outcomes. And then very important but different example, one that I am afraid happens each day that is diagnostic uncertainty over a traditional immunohistochemistry study being done at a community hospital in New England. The oncologist chose to use our FDA approved -- cleared tissue origin test to gain clarity on this poorly differentiated cancer. In the course of this work, we not only gave an accurate report as the cancers’ most likely tissue of origin which in this case was lung, but then also we were able to rapidly follow this up by doing the complete long molecular profile on the sample out of our West Coast Center of Excellence. This not only aided in patient management but also on therapy selection, again no other lab can combine these test to aid uncertainty and provide FDA level clarity on the molecular profiling that’s required to be certain about the diagnosis, but also then to inform and guide decision making on the therapy. CGI is uniquely positioned not only in these examples but 100s of examples every week and every quarter, on how to answer a broad range and every growing set of questions and issues associated with the diagnosis, with patient management, with therapy selection, but also in helping pharma partners of sub-typing populations and thinking through the issues regarding the development of companion diagnostics and how to leverage that data for therapeutic development. And this is not only in NGS but regardless of technology. This is a useful segway into an area where CGI has been heavily involved recently. The rising importance in usage of immune markers and immune data to predict response, select therapy, create patient subtypes and more importantly during the course 2014 and '15 immuno-oncology was rapidly becoming the high growth area in clinical trials. It was critical for us to get into immuno-oncology and more commonly and more importantly in the more commonly used markers, special dose that were used for the breakthrough new drugs such as PD-L1, PD-1, CTLA-4 et cetera. In late '15 and throughout this past quarter CGI has been quietly and rapidly building a unique and the state-of-the-art offering in immuno-oncology that not only includes the FDA approved immunohistochemistry markers, but also unique genomic panels to measure acute cell response and proliferation, key cell clonality using flow cytometry as well as molecular techniques and also RNA sequencing and targeted DNA sequencing. As a result we are now actively involved in over dozen immuno-oncology trials and we expect to close another four to six in the next 30 to 40 days. Biotech companies and pharma companies as well as major device companies are really further assessing our capabilities to provide not only the mission critical immuno-oncology data but also the genomic profile. We've really become a partner in gathering this data and helping them provide disease-specific datasets to subtype patient populations and predict response. We fully estimate that one third of 40% of our revenue in clinical trials by the close of this year may come from the immuno-oncology based trials or immuno-oncology focused trials where CGI is doing both the IO as well as the genomic and biomarker work. This is a major uptick in our total adjustable market and will help our drive towards scale of becoming breakeven faster. Now let me provide a summary of our key achievements during the past quarter and then outline some of our business objectives for the remainder of the year. In the first quarter of 2015 our team accomplished a number of significant milestones in terms of integration and cost rationalization of the laboratory and support operations, but at the same time developed a new industry leading capabilities in immuno-oncology and securing new biotech and pharma customers. Let's review some of these areas more closely, starting with revenue growth I'll provide a few highlights and then Ed will dive deeper into the details following the strategy update. For the first quarter ending March 31st, our total revenue increased 39% over the same period in the prior year to 6.1 million from 4.3 million in '15. In addition our gross profit margin improved significantly to 32% during the first quarter of 2016 and allowed us to have $2 million in gross margin dollars, a significant improvement from 13% or only 700,000 in the last quarter of 2015. We're very focused on continuing to improve gross profit margin and on the operating efficiency of the Company and from the first quarter -- sorry, from the fourth quarter of 2015 to the first quarter of 2016 we were able to decrease our expenses by $1.4 million or $4.8 million on an annualized basis. This is only the first inning of this cost rationalization and we're continuing to take similar measures this quarter as well on improving margin and at the same time leveraging our scale and network, so that each additional top-line delivers greater bottom-line results. It's an extreme area of focus for the Company but also we think one that will make us more durable and stronger as a Company in the long-term. Our long-term vision is being that bench-to-bedside partner in oncology so broadening our business, where we increase our addressable market and getting expertise in solid tumors, was absolutely critical to our growth strategy, it also drove our clinical services business growth which increased from 0.9 million a year ago to 2.5 million in the first quarter. And this was largely driven by the expansion of our clinical footprint from Response and our expansion into solid tumor testing. This transformative transaction brought us expertise in solid tumors and allowed us also to participate in more solid tumor trials both IO led trials as well as targeted therapeutics. We've been very pleased with the initial customer reception and penetration that we're receiving and have up sold several accounts. Clinical volumes during the quarter were 6,608 tests which is a measure we'll continue reporting on throughout the course of the year and we'll continue -- we expect continual growth on this front throughout the year. As you might have also seen mentioned in our press release we also increased the revenue expectations in profile with the ALCHEMIST trial which focus on actionable molecular classification of lung cancers. We've now expanded that to include PD-L1 testing. Besides achieving significant cost synergies and expanding the relationships and contracts with pharma companies and research partners, we've also positioned the Company with very good long-term growth pillars. We'll go through some of these in some detail. Multiple Myeloma which is an expensive cancer to manage and treat and where gold standard is truly needed, we recently finalized the licensing and commercialization agreements with Mayo Clinic and Oncospire Genomics and this test has been launched now for clinical trial usage, in biotech and pharma companies generated our first revenue recently and this panel now is going into clinical usage here in Q2. This panel will identify patients who need to get followed up on earlier, determine the best treatment and more importantly has content that other panels don’t have, namely the ability to provide a very accurate way of what the therapeutic response is and also to monitor clonality of the disease overtime. This was designed with input from thought leaders at Mayo and it has been presented at over five posters and publications at ASH as well as several other conferences and we believe this has the potential to truly change the paradigm of testing in multiple myeloma. This is a very important and almost a very unique modeled system for how the future of cancer testing would be done by replacing several assays of, one, measuring and monitoring clonality overtime, using it early on and in clinical trials and then introducing it in a revenue generating way into the clinical study. So again we think this is a model not only for the development of novel diagnostic systems but also very importantly for the commercial launch as well. We have also made very several solid advancements in our unique and proprietary kidney cancer panel, most recently as you might have read in our press release, we launched a joint -- a major joint development and validation initiative with the Huntsman Cancer Institute at the University of Utah with Dr. Neeraj Agarwal, the Director of the Genitourinary Program where along with Dr. Agarwal and Pfizer we are validating the NGS panel for the prediction of patient response to Sunitinib in Kidney Cancer and also we are now beginning the development of the cell-free DNA assay to assess treatment response and monitor disease progression. We know there has been a lot of hype, and a lot of excitement and a lot of promise and we think there is great potential promise in cell-free DNA, measurement and monitoring. But we are really using this technology again in a disease focused manner to monitor and manage treatment and understand disease progression, much like cancer itself, we don’t think there is a one sided it's all approaching in cell-free DNA. And the disease focus in the application in cell-free DNA technology is what will determine and drive true patient value in the long-term. We believe that the work we are doing in Kidney Cancer to introduce a cell-free DNA assay alongside with the NGS panel it will be a model system for other cell-free DNA assays of true value will be developed, where it will be developed alongside very specific disease and application usage. So you can expect more of that from CGI through the year. During the first we also launched an industry leading clinically actionable and focused NGS panel for solid tumors that can offer molecular profiling for long colorectal breast/skin cancers, this panel is already being actively used in a global open label basket trial to identify specific genomic aberrations across the diverse range of tumors. So again our goal is to introduce novel unique NGS panels that are disease specific that are both used in clinical trials but at the same time also available and used in routine clinical setting. We also initiated a large clinical study very recently in late Q1 early Q2 with a global biopharma company where they are leveraging our CLL and our Lymphoma NGS panels to help subtype patients and aid in the molecular characterization of patients with B-cell cancers. As you can tell, our team has been picking up steam through the quarter and has been significantly busy recently well beyond the integration of response genetics and continuing to develop and launch our unique portfolio of capabilities. Not only on the genomic side but also on the immuno-oncology side, this is what we believe allows us to be a very valuable to the biopharma community and most importantly very valuable to the clinical community long-term. Ed will walk you through the details of our financials for the quarter. Again this year we had 6.1 million in revenue, 3.2 million coming from biopharma, 2.5 from the clinical and approximately 260,000 from discovery services. So with that I’ll turn it over to Ed, for Ed to review in detail our financial results for the quarter.

Thank you, Panna, and good afternoon everybody. In the two months, since our last conference call we have continued the focus on the integration of our Los Angeles acquisition and streamlining internal operations. We have reduced headcount by more than 20 physicians, this process sets up the company to achieve significant financial benefits and reduce cash burn as our revenue accelerates. My discussion will focus on changes in the first quarter of 2016 versus the first quarter and some fourth quarter information of 2015. For additional information please refer to our SEC filings including our Form 10-Q for the quarter ended March 31, 2015. The first quarter of 2016 was a record quarter for the company. Revenues were 6.1 million, a 39% increase over the first quarter of 2015, and 11% higher than the fourth quarter of 2015. Revenue from biopharma services totaled 3.3 million and were essentially flat year-over-year. As we have discussed previously we are seeing a strong increase in biopharma activity, especially in the immuno-oncology arena. We expect this to continue the rest of the year. Clinical services totaled 2.5 million in the first quarter, an increase of 181%. In the first quarter of 2016 we had the activities of Response Genetics for the full quarter and this is the primary driver for the increase. As we said previously, there was a significant opportunity from the Response acquisition is in the area of revenue synergy and the ability of the combined entities capture additional market share. Discovery services generated 262,000 in revenue, up 58% from the first quarter of 2015 and 66% from the fourth quarter of 2015. Cost of revenues increased 31% or $1 million, this increase includes the cost of revenue from the acquired business of $1.2 million offset by decreases in lab supplies and compensation costs. Gross margins were 32% or $2 million which compares to 28% or $1.2 million in the first quarter of 2015. The improvement in gross margin percentage is attributable to better utilization of cost along with the margin contribution from our acquired business. Research and development expenses in the first quarter increased 20% or $254,000 to $1.5 million. In the first quarter we had a number of validation and development initiatives across our facilities with an emphasis on transforming the LA facility into our Solid Tumor Center of Excellence. These activities resulted in increased compensation cost of $500,000 and other costs of $100,000, these increases were partially offset by a decline in our share of the loss from Oncospire, our joint venture with the Mayo Clinic. In 2016 our share loss was $12,000 compared to $207,000 in 2015. General and administrative expenses in the first quarter increased 45% or $1.3 million to $4.3 million. Our acquired operations contributed 1.1 million with the remainder of the increase due to a mix of compensation and professional fees. Our G&A expense declined more than 700,000 from the fourth quarter of 2015 as we did not have the legal and other cost related to the acquisition of our LA operation inQ1. Sales and marketing expenses increased, in the first quarter increased 16% or $183,000 to $1.3 million primarily due to the sales efforts of our acquired operations. On our last call we emphasized the amount of our work we had done to rationalize our sales efforts. Our Q1 2016 spend is down $428,000 or 25% from the fourth quarter of 2015. Total expenses were $11.3 million in the quarter compared to 8.5 million in the same period last year, included in these expenses are stock-based compensation of $534,000 in Q1 2016 versus $696,000 in Q1 2015. Our shares outstanding at March 31, 2016 were 13,652,000. Our basic and diluted shares for the Q1 earnings per share calculations were 13,547,000 shares. Our net loss in the first quarter was $5.3 million or a $0.39 per diluted share compared to a loss of $0.44 per diluted share in the first quarter of 2015. We had total cash at March 31, 2016 of $13.3 million. In our last call we spoke about our focus on reducing the cash burn and achieving cash flow breakeven. In Q1 our burn was higher than our earlier projections as the increase in the accounts receivable was higher than we forecasted, we have a number of initiatives underway to address this issue and bring down the use of cash from accounts receivable growth. Like all initiatives some of these are more in our control than others while we cannot the guarantee the success of all our initiatives, we hope to be able to report significant progress on our next call. I'll now turn the call back to Panna.

Thank you, Ed. As Ed noted, again in the past quarter we enjoyed focused on not only the rationalization of the laboratory operations across sites, but also in positioning ourselves for the future with combining immuno-oncology with our genomic capabilities. Immuno-oncology is an important element to developing a winning business in this category and as you know immuno-oncology has already seen several blockbuster drugs in the market and several very large scale clinical trials that can potentially truly change patient care. Analysts already project that immuno-oncology can be nearly 40% to 50% of cancer drugs spending by 2022 to 2024 and every major pharmaceutical company today in the top-10 has very large immuno-oncology programs. Our largest items in the pipeline today for clinical trials are all immuno-oncology driven. So, we're very well positioned to be partnered for them by having a comprehensive IO testing and immune monitoring capability and along with the traditional genomic and biomarker capabilities that CGI has become known for. In that sense we're positioned very early and very importantly at a time that is right to expand our revenue potential in the clinical setting and as these drugs are just beginning to be brought to market by biotech and pharma customers. Because of our integrated offering we think this sets us apart and will be critical to expanding our value proposition going forward. During 2016 we've already closed on 12 trials that have begun, and we believe that these will accelerate revenue growth and give us greater access to streamlining our cost and improving our margins. As it was reviewed 2016 was a strong quarter for improving efficiency and positioning ourselves for the long-term growth not only from an IO offering but also from new test and services in the oncology space including multiple myeloma, Lymphoma, renal and eventually our hereditary panels. And we look forward to communicating these milestones throughout 2016. Milestones that we expect will include additional partnerships with biotech and pharma, additional test launches and also other key steps to ensure that we get adequately reimbursed by the commercial payors. We believe these are all important steps to realizing our vision of being the oncology diagnostics partner of choice from bench to bedside. With that I would like to now open the line for questions.

Thank you. [Operator Instructions] We ask that you please limit yourself to one initial question. [Operator Instructions] And we will take our first question from Paul Knight with Janney Montgomery. Please go ahead.

Hi Panna, you were talking your service offering, can you talk about the environment right now, why you are getting this success with the 41 million of signed contracts and you have said increased the year, could you talk about a year ago totals et cetera and just kind of a new discussion I think in these press release, could you talk about spend environment, a year ago total? And I’ll stop there.

Sure, thank you Paul. Yes so the environment today, what we are seeing is that there is increasing desire by the biotech and pharma companies, not only continue the trials that they currently have, which again as we all know is an era of targeted therapeutics. But now they are taking these existing trials and adding in immuno-oncology on to them. Or they are recalibrating and doing an IO driven where they are looking for high responder groups at IO that, where their targeted therapeutic will have a much -- get a really oomph in terms of its impact on the patient and therefore maybe it's a subtype that they will get instead of the 30% or 40% responder group maybe then get a 50%-60% responder group but the response rate will be significantly more durable because of the immune response. This increases the clinical trial complexity significantly and so typically these pharma’s don’t want to go to one or two or three laps to do it all and timeliness is immune monitoring is critical. So when I look at the CGI capabilities of being able to do both, it is a very, very compelling value proposition. Not because we have the infrastructure and technology but we also really understand those disease states and we really can partner with them to talk about okay here is the things that need to be monitored and here is things that board in line, potential responders. And so again these the largest trials today in cancer, I mean there are obviously cardio trials and other trials but in cancer the largest trial today are all IO driven. And as one of the our new -- very large trial that we just closed four big ones with a major pharma and we asked them what else can we do for you guys, what other things can we do other initiatives. And he looked at me and he said just execute, execute and execute. So if you do these really well, there is -- we are doing 20,000 more patients over the next several years. So I think, it is the combination of scales and capabilities that make us compelling, but at the same time mapping these to specific disease classes makes us more interesting and because we are small and nimble enough to focus and execute which the large groups can't seem to get done. About a year ago today, the majority of our work was in the clinical trial, the expected revenue was about 30 million and again this is a number we are taking a lot more -- a much more disciplined look at. And so we are now at a little over 41 and it has grown 4.5 close to 4.5 in this quarter alone and out of that some of the biggest and most exciting ones were again from immuno-oncology. It started a little bit in Q4, where we had a few initial trials but now again it's borne up to 12, we expect to close another three or four in the next month. And the biggest ones that we see are both IO as well as targeted therapeutics. So I think the climate has definitely shifted away from genomic markers being everyone's desire through the combination of some genomic signature of markers but really looking at, responder group seizing immune markers. And so we think this is an area that really will drive long term differentiation. And again we have seen the academics, some of the academics that you and I both know Paul, have long talked about their genomics only approach have some limitations and they have talked about systems biology. In a way, this is a very early and very simple way to look at systems biology to making its impact on patient selection because we are looking at the immune system and you are looking the somatic genome. They are two different systems that you are bringing together to now look at patient subtypes and patient monitoring. We are saying that in this traditional sequencing and NGS there is a lot of capacity out there with vendors and providers and so being able to differentiate by offering both the immune and the NGS is a way to differentiate, preserve price I believe long-term and be of more value. Again we saw a pretty big uptick from last year to this year and a lot of that is not just existing growth from some of our big accounts but a lot of new -- total new growth the novel growth from IO trials.

[Operator Instructions] We'll go next to Ben Haynor with Feltl and Company. Please go ahead.

And so it sounds like these IO trials are really heating up for you, when you look at these trial base and the dozen or so that you signed already how do they kind of shake out in terms of preclinical Phase 1, Phase 2, Phase 3 are they pretty similar to the trials you're involved in. Otherwise outside of immuno-oncology and then if you do hit that, that kind of 33% to 40% number that you mentioned the portion of biopharma coming from immuno-oncology this year, would it be possible for you to reach cash flow breakeven this year slightly ahead of, what you talked about on the Q4 call which should be early next year?

Yes so I'll take each one of those questions again, we're -- again we dropped, on an annualized basis, 4.5 million-4.8 million in cost, we are continuing to do that, so, we'll continue to remove cost and be more moderate with our expense line again this quarter we've already, we again are continuing to rationalize headcount, look at overlapping teams et cetera. But again the top-line is where we're going to get to the breakeven faster and for us that again -- our belief is that around $10 million quarter, so, $9.5 million to $10 million quarter is where we can get to that cash flow breakeven point. Yes so, I think so these trials could start a lot faster and a lot earlier. To give you some context of the 12 that we mentioned in the press release last week, the smallest trial was a very early stage validation probably around 60,000 the largest trial was the launch of a Phase 3 that if all goes well could be 3 million or 4 million, so there's a vast range there. And the timing is different so, we're trying to -- we're seeing the immuno-oncology trials that we're getting on an average couple of hundred thousand to million and some are very early and the vast majority tends to be Phase 2 right now our bucket than the vast majority was Phase 2. There are a few Phase 1s that are probably going to be fast tracked to Phase 2 or Phase 3, but immuno-oncology what you are seeing typically -- once you have a responder group to go quickly to Phase 3. It is a very different development profile than a targeted molecule because once you've a responder group identified you are usually doing at a conjunction with a known molecule.

[Operator Instructions] And we have a follow-up from Paul Knight with Janney Montgomery. Go ahead please.

Could you talk to, what was the Response Genetics contribution to revenue in Q1?

Let's see, we'll look at, hold on a second while we get that number. A - Ed Sitar Less than four.

It is important to bear in mind that the real way to look at that where you really look at the segment, not segments but the categories as being biopharma and clinical. And the biopharma work can be done at any of the sites, so a lot of the new biopharma work that we got, that we delivered in response during Q1 was about $460,000 of biopharma work and that $460,000 of biopharma work was pretty much all new work closed as a result of CGI, so even though the work was done and the response site is of mostly for lung cancer NGS and lung cancer profile and it was closed as a result of CGI work during Q4. The major contribution came from the clinical services, the clinical site and again the clinical site delivered about 1.7 million and a few hundred thousand of that came from CGI clients or traditional CGI East clients that we migrated to the Center of Excellence because we are trying to do all the solid tumor work in Los Angeles. So, out of the 17 on the clinical services probably about -- historically about 14, 13 came from Response clients and the rest came from CGI clients being delivered at that site. The biopharma business about 460, the vast majority of that was all CGI driven. And so we are trying to go and one of the major things that we are trying to do to get the synergies across places is to move from site P&Ls to really category revenue numbers. Category by clinical biopharma discovery regardless of where is being done. So it is hard to give an apples to apples, kind of comparison because once you took over response, as you know Paul we also changed the entire billing infrastructure. So response is averaging a much higher bill rate for clinical tests and we are probably conservatively half that. Just because we are much more conservative in our assumptions on the clinical side than they have been, so it's not kind of it's hard to do it direct apples to apples comparison. But those are kind of the numbers of what the site delivered in terms of revenue.

And we have a follow up question from Ben Haynor with Feltl and Company. Please go ahead.

On the cell-free DNA potential or where you are working on there, can you talk a little bit more about that and when you see the potential launch, the focus and growth items?

Yes, so I mean in cell-free DNA, we are very excited about, we have just started -- again we think the kidney is a great system to look at it. Because disease progression there really is something more challenging, you don’t want to do these partial nephrectomies to get biopsy material so there it is very, very compelling to do it from blood or urine. So as you know we have a panel that we validated, so we are doing simultaneous blood and biopsy material, some multi -- actually it is multiple sites even though it is being headed up by Dr. Neeraj Agrawal at Huntsman at Utah. We do also have another one of the thought leaders at City of Hope involved in this as well. We think it will be an end of the year initiative, we will be presenting early next at GU ASCO but we expect to panel to launch this year and probably the cell-free DNA assay by the end of the year. And again we think it's a model for other systems as well. So we are looking at other places where we can make an impact and do side by side comparisons and monitoring of both the biopsy material as well as the cell-free material.

And then if I could just only one quick one in for Ed, a separate this is but depreciation and amortization in the quarter?

Sure, depreciation was $518,000, amortization was $87,000.

[Operator Instructions] And at this time I would like to turn the conference back over to your presenters for any additional and/or concluding remarks.

Okay. Thank you all for listening on the update for the first quarter. We appreciate everyone's time and focus, again we look forward to hitting more milestones, improving our overall cost structure, making more announcements with our biopharma customers. And again we look forward to our next call. Thank you.

Ladies and gentlemen, this does conclude today’s conference. We thank you for your participation.