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Genomic Health Q2 Revenues Up 16 Percent

NEW YORK (GenomeWeb) – Genomic Health reported after the close of the market on Tuesday that its second quarter revenues rose 16 percent from Q2 2015, thanks in large part to a 12 percent increase in the number of Oncotype Dx tests delivered during the quarter.

For the three months ended June 30, the firm reported total revenues of $82.0 million, up from $70.6 million a year ago, and beating the consensus Wall Street estimate of $81.3 million.

The company reported US product revenues rose 15 percent to $69.6 million from $60.7 million a year ago. International product revenue rose 24 percent to $12.3 million from $9.9 million a year ago. The firm also reported $88,000 in contract revenues from a collaboration with Pfizer on renal cell carcinoma.

Genomic Health delivered more than 29,060 Oncotype Dx test results in Q2, up 12 percent from 26,060 test results delivered in the year-ago period. US invasive breast tests delivered grew 8 percent and prostate tests delivered grew 13 percent compared with the prior year. International tests delivered grew 23 percent.

"In the second quarter we delivered double-digit revenue growth of 16 percent driven by an increase in Oncotype Dx tests delivered across our key markets," said Chairman and CEO Kim Popovits in a statement. "In addition, we expanded our Oncotype IQ Genomic Intelligence Platform with the launch of our first liquid biopsy test, Oncotype SEQ, for late-stage solid tumors, and announced an exclusive collaboration to commercialize Epic Sciences' AR-V7 liquid biopsy test for metastatic prostate cancer. These achievements further reinforce both our strategy and leadership in providing genomic-based diagnostics to optimize outcomes across the cancer patient journey."

On a conference call with analysts following the release of the earnings, Genomic Health's Chief Business & Product Development Officer Frederic Pla described Oncotype SEQ as a blood-based next-generation sequencing test that finds variants in a select panel of genes in order to find clinically actionable information — such as for treatment sensitivity or resistance — for patients with stage 4 solid tumors. The test database will also be able to match patients with clinical trials.

The company has begun delivering Oncotype SEQ through a controlled physician experience program, working closely with doctors to make sure they know how to order the test and interpret the results. They are currently focusing on patients with non-small cell lung cancer, and have identified actionable variants in a majority of samples run to date, Pla said.

The firm's net loss for the quarter narrowed to $6.1 million, or $.18 per share, from $9.2 million, or $.29 per share, a year ago, in line with analysts' average estimate for a loss of $.18 per share.

Its R&D costs rose 5 percent to $15.3 million from $14.6 million in Q2 2015, and its SG&A costs rose 5 percent to $56.5 million from $53.8 million.

Genomic Health ended the quarter with $40.7 million in cash and cash equivalents, and $52.9 million in short-term marketable securities.

For 2016 the firm raised its total revenue estimate to a range of $325 million to $335 million, up from previous guidance of $320 million to $335 million. It also raised its estimate for the number of Oncotype Dx tests delivered to a range of 118,500 to 121,000, from a previous guidance of 117,500 to 121,000 tests completed. Genomic Health reiterated its guidance for a net loss of $12 million to $18 million, or $.37 to $.55 per share. Analysts on average expect 2016 revenues of $330.3 million and a net loss of $.45 per share.

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