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Genomic Health Q3 Revenues up 12 Percent

NEW YORK (GenomeWeb News) – Genomic Health reported after the close of the market Wednesday that its third-quarter revenues increased 12 percent year over year.

The Redwood City, Calif.-based molecular diagnostics firm said that revenues reached $58.6 million for the three months ended Sept. 30, up from $52.1 million, but short of the consensus Wall Street estimate of $59.9 million. Product revenues rose 13 percent year over year to $58.4 million from $51.7 million a year ago, while contract revenues dipped 25 percent to $277,000 from $397,000.

Genomic Health delivered more than 18,030 Oncotype Dx test results in the quarter, a 7 percent increase from 16,890 test results a year ago, it said.

Genomic Health COO Brad Cole noted on a conference call following the release of the financials that physician practices saw patient volumes slow down in the summer quarter.

Howevere, "there are additional opportunities in invasive breast cancer," he said. "There are between two-in-five women who aren't getting access to the Oncotype DX test, which is the standard of care these days in the US. So, we still think there is plenty of opportunity there.

"The sales force is focused on reaching those areas of the country that are well below the average penetration rate of 60 percent," Cole added.

In a statement Chairman, President, and CEO Kim Popovits said that product revenue growth resulted from "significant international growth reflecting the diversification of our business and continued progress in capturing an important global opportunity."

During the quarter, the company inked an agreement to offer the Oncotype Dx breast cancer test in the UK, and earlier this year it signed a deal with NewBridge Pharmaceuticals to market the Oncotype colon cancer recurrence as well as breast cancer tests in Africa, the Middle East, and surrounding areas.

"[W]ith the announcement of positive prostate cancer validation study results, we are now positioned to leverage our proven commercial infrastructure in addressing a third major cancer, and one of the greatest needs in medicine, by making the Oncotype Dx prostate cancer test available in the first half of 2013," said Popovits.

She noted on the conference call that half of the 240,000 men currently diagnosed with prostate cancer in the US, or approximately 120,000 annually, will be eligible for the Oncotype DX prostate genomic score.

Genomic Health increased its R&D spending in the quarter 28 percent to $12.3 million from $9.6 million a year ago, and upped its SG&A spending 11 percent to $33.6 million from $29.8 a year ago.

The company posted a profit of $3.7 million, or $.11 per share, up from $3.2 million, or $.10 per share, in the year-ago period. The average analyst estimate was for EPS of $.05.

The company had $58.0 million in cash and cash equivalents and $68.3 million in short-term marketable securities at the end of the third quarter.

Genomic Health lowered its full-year guidance for tests delivered to 74,000 from a previous estimate of 76,000.

In Thursday morning trade on the Nasdaq shares of Genomic Health fell nearly 13 percent to $27.88.

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