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Foundation Medicine Revenues Climb 87 Percent in Q4 2013

NEW YORK (GenomeWeb News) – Foundation Medicine reported after the close of the market Tuesday that its fourth quarter revenues climbed 87 percent year over year and 18 percent over the previous quarter.

The Cambridge, Mass.-based cancer genomic analysis firm reported total revenues of $9.7 million for the three months ended Dec. 31, up from $5.2 million in Q4 2012 and $8.2 million in Q3 2013. It beat the consensus Wall Street estimate of $9 million.

In the fourth quarter of 2013, oncologists ordered 3,752 of the company's FoundationOne clinical test, which analyzes around 200 cancer-related genes, compared to 2,577 for the year-ago quarter. For the whole year, more than 9,000 test results were reported to physicians, the firm noted.

On a conference call following the release of the results, Foundation Medicine President and CEO Michael Pellini said that more than half of the firm's revenue in the quarter came from clinical testing. And, of the clinical tests performed, around 55 percent were from community-based practices.

"We believe that the total addressable market for FoundationOne is approximately 1 million patients in the US today, growing to nearly double that number over the next several years," said Pellini.

Jason Ryan, the firm's senior VP of finance, noted on the call that the average reimbursement per clinical test during the fourth quarter was approximately $3,400, "a slight increase from the prior quarter." As previously stated, the company expects "average payment will vary between periods until we obtain broad coverage decisions in the future." Additionally, Foundation Medicine has now begun submitting claims to Medicare.

During the fourth quarter, the company also launched its second clinical product, FoundationOne Heme for blood-based cancers.

"Clinical adoption of FoundationOne steadily increased during 2013 and accelerated through the fourth quarter demonstrating the value of the molecular information we are delivering to oncologists and pathologists," Pellini added in a statement. "In addition, clinical research use of FoundationOne by pharmaceutical partners increased, highlighted by new relationships and the expansion of our multi-year collaboration with Novartis."

Foundation Medicine posted a net loss of $13.1 million, or $.48 per share, for Q4 2013, compared to a net loss of $5.6 million, or $2.17 per share, in Q4 2012. The loss per share was higher than the $.43 expected by Wall Street analysts.

Its Q4 R&D expenses were $6.8 million, up 48 percent year over year from $4.6 million. The firm's SG&A costs nearly tripled to $12.1 million from $4.1 million.

As reported last month, the company's 2013 full-year revenue was $29 million, compared to $10.6 million for 2012.

Its net loss for the year was $42.9 million, or $4.64 per share, compared to a loss of $22.4 million, or $10.47 per share, for FY 2012. Analysts, on average, had expected a loss per share of $4.33.

For full-year 2013, its R&D expenses were up 68 percent to $24.9 million from $14.8 million, while SG&A spending jumped to $34.2 million from $12.1 million.

Foundation Medicine said that it expects to report between 22,00 and 25,000 tests in 2014, including both its FoundationOne and FoundationOne Heme tests, and expects revenue to be in the range of $52 million to $58 million.

In the first half of 2014, the company plans to launch an updated version of its FoundationOne test with an expanded set of genes for solid tumors.

As of Dec. 31, the company had $124.3 million in cash and cash equivalents.

In early Wednesday trade on the Nasdaq, shares of Foundation Medicine were up 5 percent at $34.