Making progress in developing our colon cancer screening test

Having multiple presentations and posters at the American Academy of Cancer Research, including an oral presentation on the feasibility of a serum-based microRNA colon cancer screen

Entering into an exclusive U.S. distribution agreement with Prometheus Laboratories for our first three cancer diagnostic tests, miRview mets, miRview squamous and miRview meso

Raising $8.0 million from the sale of 2.0 million ordinary shares to Prometheus

Publishing by us and our collaborators of confirming data on the miRview squamous test for lung cancer in the Journal of Clinical Oncology

Selling Parkway Clinical Laboratories for a purchase price of up to $2.5 million payable over a period of six years based on revenues

Management Commentary

"The first quarter of 2009 was a highly productive period for Rosetta Genomics, in particular because various actions we took are allowing us to turn our attention almost exclusively to the development of a colon cancer screening test," said Amir Avniel, president and chief executive officer of Rosetta Genomics. "With a target market of more than 90 million people over the age of 50 in the U.S., we believe that a non-invasive, serum-based colon cancer screening test, if successful, will provide a game-changing method for diagnosis of this disease, which is eminently treatable when caught early. We are working to finalize the proprietary biomarkers that will be used in the test, a process that is expected to be completed by the end of June.

"We were very pleased to give an oral presentation at this year's American Academy of Cancer Research on the feasibility of a serum-based microRNA colon cancer screen. We look forward to publishing data in peer-reviewed journals and to the validation of our results by the scientific community. If we can successfully develop this test, we believe we remain on track to have this product ready for commercialization by the end of 2009 or early in 2010," he added.

"We took a number of steps during the quarter and recent weeks that have allowed Rosetta the time and money to work so intently on the colon cancer screen," Mr. Avniel continued. "We entered into an exclusive U.S. licensing and distribution agreement with Prometheus Laboratories for our first three cancer diagnostic tests. In conjunction with this agreement, we raised $8.0 million from the sale of 2.0 million ordinary shares. This provides Rosetta with funding for the colon cancer test, while allowing our research staff to turn their attentions to developing the test more rapidly.

"We are also announcing today the sale in a management buy-out of Parkway Clinical Laboratories for $2.5 million, to be paid as a fixed percentage of revenues over six years. Parkway's main business is drugs of abuse and pre-employment drug testing, and as such, is not part of Rosetta's core business. However, with its CLIA certification Parkway helped facilitate Rosetta Genomics Laboratories, or RGL, in obtaining CLIA certification. We will continue to perform our microRNA tests at RGL."

Financial Overview

Revenues for the first quarter of 2009 were $654,000 mainly related to Parkway.

Operating loss for the first quarter of 2009 was $3.7 million (including a non-cash expense of $277,000 related to stock-based compensation), compared with an operating loss of $3.7 million (including a non-cash expense of $191,000 related to stock-based compensation) for the corresponding quarter of 2008.

Research and development expenses were $1.7 million for the first quarter of 2009 compared to $2.4 million for the first quarter of 2008, and remain the Company's largest expense accounting for 45% of 2009 first quarter operating expenses.

On a non-GAAP basis, excluding stock-compensation expense, the net loss for the 2009 first quarter was $3.3 million, or $0.27 per ordinary share. This compares with the comparable figures for the 2008 first quarter of $3.7 million, or $0.31 per ordinary share. On a GAAP basis, the net loss for the 2009 first quarter was $3.6 million, or $0.30 per ordinary share. This compares with the GAAP net loss for the 2007 first quarter of $3.9 million, or $0.33 per ordinary share.

As of March 31, 2009 the Company had $13.1 million in cash, cash equivalents, short- and long-term bank deposits and marketable securities. This does not include the $8.0 million in gross proceeds we received from the sale of 2 million ordinary shares to Prometheus in April.

Details reconciling non-GAAP amounts with GAAP amounts including specified items are provided in the table attached.

2009 Financial Guidance

The Company expects its cash burn from operations for 2009 to be approximately $10 million, exclusive of the potential beneficial impact from any new distribution partnerships.

Conference Call Information

Rosetta Genomics will host a conference call beginning at 10:30 a.m. Eastern time today to discuss first quarter activities and recent corporate developments. To access the live conference call, U.S. and Canadian participants may dial (866) 239-5859; international participants may dial (702) 495-1867. To access the 24-hour audio replay, U.S. and Canadian participants may dial (800) 642-1687; international participants may dial (706) 645-9291. The access code for the replay is 98932033. The replay will be available until May 23, 2009.

A live audio webcast of the call will also be available on the "Investors" section of the Company's website www.rosettagenomics.com. An archived webcast will be available on the Company's website approximately two hours after the event, and will be archived for 30 days thereafter.

About Rosetta Genomics

Rosetta Genomics is a leading molecular diagnostics company developing and commercializing molecular diagnostic products based on its proprietary microRNAs. Rosetta Genomics is working to develop early detection cancer screening products, including a colon cancer screening test. Rosetta performs its commercial molecular diagnostics tests at Rosetta Genomics Laboratories in Philadelphia.

About MicroRNA

MicroRNAs (miRNAs) are recently discovered, naturally occurring, small RNAs that act as master regulators and have the potential to form the basis for a new class of diagnostics and therapeutics. Since many diseases are caused by the abnormal activity of proteins, the ability to selectively regulate protein activity through microRNAs could provide the means to treat a wide range of human diseases. In addition, microRNAs have been shown to have different expression in various pathological conditions. As a result, these differences may provide for a novel diagnostic and therapeutic strategy for many diseases.