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Foundation Medicine's Q1 Revenues Climb 68 Percent; Misses Estimates

NEW YORK (GenomeWeb) – Foundation Medicine reported after the close of the market on Monday that its 2015 first quarter revenues rose 68 percent year over year.

The Cambridge, Massachusetts-based cancer genomic analysis firm reported total revenues of $19.3 million for the three months ended March 31, up from $11.5 million in the first quarter of 2014. It fell short of the consensus Wall Street estimate of $21 million.

Revenue from clinical testing rose 56 percent to $11.1 million, up from $7.1 million in Q1 2014, while revenue from its pharmaceutical customers rose 90 percent year over year to $8.2 million.

The company reported 7,854 clinical tests in Q1, including 6,885 FoundationOne tests and 969 FoundationOne Heme tests. It also ran 1,596 tests for its pharmaceutical clients. The company's cancer knowledgebase, FoundationCore, grew to 43,000 clinical cases.

Foundation Medicine posted a net loss of $17.0 million, or $.59 per share, missing the average analyst estimate of $.53 per share. Its net loss for Q1 2014 was $12.2 million, or $.44 per share.

The firm's Q1 R&D expenses were $8.7 million, up from $6.9 million in Q1 2014, while SG&A expenses rose to $18.7 million from $11.4 million a year ago.

Foundation Medicine was reimbursed an average of $3,400 per test, Jason Ryan, the company's chief financial officer, said during a conference call discussing the firm's first quarter performance. That number is on par with its year-ago reimbursement rate, but down sequentially from $3,600. Ryan added that some "volatility is to be expected before we gain broader reimbursement coverage."

In April, Foundation Medicine approved Roche's pending offer to take a majority stake in the company. Foundation Medicine CEO Michael Pellini said in a statement accompanying the Q1 results that Foundation Medicine is "particularly excited to have commenced our R&D and commercial agreements with Roche."

Specifically, Foundation Medicine is already supporting several of Roche's clinical programs, including a Phase III clinical trial for a PD-L1 inhibitor. Teams are also in place to develop products in the ctDNA space, companion diagnostic market, and a new immuno-oncology testing platform, Steven Kafka, Foundation Medicine's COO, said during the call.

The firm finished the quarter with $61.7 million in cash and cash equivalents.

In 2015, Foundation Medicine expects revenue to be in the range of $105 million to $115 million and expects to report between 43,000 and 47,000 clinical tests. In addition, as previously reported, it plans to launch a circulating tumor DNA test this year for its pharmaceutical customers and next year for clinical customers.

In Tuesday morning trade on the Nasdaq, shares of Foundation Medicine dropped 9 percent to $40.14.