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Foundation Medicine Revenues Rise 93 Percent in Q4

NEW YORK (GenomeWeb) – Foundation Medicine reported after the close of the market Tuesday that its fourth quarter revenues rose 93 percent year over year and its clinical test volume also grew 93 percent.

The firm reported total revenues of $18.7 million for the three months ended Dec. 31, up from $9.7 million in Q4 2013, exceeding the consensus Wall Street estimate of $18.1 million.

In the fourth quarter of 2014, oncologists ordered 7,233 of the company's tests compared to 3,752 during the year-ago fourth quarter. This included 6,216 FoundationOne clinical tests and 1,017 of its FoundationOne Heme tests.

Over the full year, the company reported more than 24,271 test results to physicians, an increase of 167 percent over 2013 and including 20,555 FoundationOne and 3,716 FoundationOne Heme results.

According to the company, outside its clinical testing business, an additional 2,009 test results were reported to pharmaceutical partners during the quarter.

Revenue from pharma partners was $8.4 million in Q4, up 92 percent from the same period in 2013.

"Commercial execution and growth rates were strong across both our clinical and pharma customers in the fourth quarter, highlighting the broad adoption of our comprehensive genomic profiling approach," Foundation Medicine President and CEO Michael Pellini said in a statement.

During a call discussing the firm's earnings, Pellini said that Foundation Medicine ended the year with approximately 60 percent of its clinical testing volume coming from community-based physicians.

He also highlighted some of the firm's recent strategic and operational milestones, culminating in the announcement of a broad collaboration agreement with Roche.

In January, Roche agreed to make a $250 million investment in Foundation Medicine. The transaction is subject to Roche's acquisition of at least 52.4 percent and up to 56.3 percent of the company's outstanding shares on a fully diluted basis and the satisfaction of other closing conditions, Foundation said.

"This collaboration brings together two of the leading companies in the fight against cancer," Pellini said during the call. "We believe it will accelerate our commercial efforts, will drive introduction of new molecular solutions for oncology, and will fast track the globalization of comprehensive genomic profiling."

Foundation Medicine posted a net loss of $13.3 million, or $0.47 per share, for Q4 2014, compared to a net loss of $13.1 million, or $.48 per share, in Q4 2013. It beat the $0.51 loss per share average expected by Wall Street analysts.

In Q4 the company's R&D expenses were $7.8 million, up from $6.8 million year over year, and its SG&A costs rose to $17.2 million from $12.1 million.

The company's 2014 full-year revenue was $61.1 million compared to $29 million for 2013, and above the Wall Street average estimate of $60.4 million. Pharma revenue for the year was $24.4 million compared to $14.2 million in 2013.

Its net loss for the year was $52.2 million, or $1.87 per share, compared to a loss of $43.1 million, or $4.64 per share, in 2013. Analysts, on average, had expected a loss per share of $1.92.

For full-year 2014, its R&D expenses were $30.6 million, up from $24.9 million the previous year, while SG&A spending jumped to $56.3 million from $34.2 million.

Foundation Medicine said that it expects to report between 43,000 and 47,000 tests in 2015, and it expects revenue to be in the range of $105 million to $115 million, assuming completion of its Roche transaction in the second quarter of 2015.

The company also said that it expects to launch a cell-free DNA liquid biopsy test during 2015. According to Foundation Medicine Chief Medical Officer Vincent Miller, this initial launch will be a product for the company's biopharma customers. The firm then hopes to follow that with a more broadly available commercial version in 2016.

Though the company has not detailed the planned targets for this test, the cell-free DNA product will most likely be more narrowly targeted than FoundationOne, according to Foundation Medicine COO Steven Kafka. It will also likely be targeted to cancer patients for whom tissue biopsy is difficult, or in the context of monitoring cancer over time, he said.

"We've had an ongoing program in developing a cell-free DNA product as well as looking at an opportunity to develop a circulating tumor cell product," Miller said during the call. "We believe these are potentially complementary approaches."

As of Dec. 31, the company had $72.1 million in cash and cash equivalents.

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