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Genomic Health's Q4 Revenues Rise 13 Percent

NEW YORK (GenomeWeb News) – Genomic Health reported after the close of the market on Wednesday that revenues in the fourth quarter increased 13 percent year over year as the firm beat the consensus analyst estimates on the top and bottom lines.

The Mountain View, Calif.-based molecular diagnostic test development firm took in $60.4 million in revenues for the three months ended Dec. 31, 2012, compared to $53.4 million a year ago, topping the average Wall Street estimate of $58.9 million.

Product revenues in the quarter rose 13 percent to $60.0 million from $53.2 million a year ago, while contract revenues increased 78 percent to $430,000 from $242,000.

Genomic Health said that it delivered more than 18,820 Oncotype DX test results in the quarter, up 10 percent from 17,080 test results in the year-ago period.

Its net income came in at $2.0 million, or $.06 per share, in the quarter, down from a profit of $2.6 million, or $.08 per share, a year ago. The company still surpassed the average analyst estimate of $.03 per share.

Its R&D costs were up 29 percent to $13.3 million from $10.3 million a year ago, and SG&A costs climbed 7 percent to $35.4 million from $33.0 million a year ago.

For full-year 2012, Genomic Health posted $235.2 million in revenues, a 14 percent improvement over $206.1 million in 2011, and above the average analyst estimate of $233.4 million.

Product revenues increased 14 percent to $233.5 million from $204.8 million in 2011, while contract revenues jumped 31 percent to $1.7 million from $1.3 million.

The company said it delivered more than 74,520 Oncotype DX test results in 2012, up 12 percent from more than 66,600 test results in 2011.

Genomic Health posted a profit of $8.2 million, or $.26 per share, in 2012, compared to a profit of $7.8 million, or $.26 per share, in 2011. It beat Wall Street expectations of $.21 per share.

The company increased its R&D spending 23 percent in the year to $49.1 million from $39.9 million a year ago. Its SG&A costs increased to $140.6 million, a 13 percent hike from $124.2 million in 2011.

The company completed the year with $18.0 million in cash and cash equivalents and $81.1 million in short-term marketable securities.

"We delivered strong full-year 2012 financial results highlighted by 14 percent revenue growth and record revenue in the fourth quarter, reflecting continued market expansion in the US and diversification of our business led by significant international growth," Kim Popovits, chairman, president, and CEO of Genomic Health, said in a statement.

"With the planned launch of the Oncotype DX prostate cancer test, our third product franchise, we believe we are uniquely positioned to further diversify our business for long-term growth, and look forward to sharing full results of the prostate clinical validation study at [the American Urological Association annual meeting] in early May," she added.

Company officials said on a conference call following the release of the results that the firm expects to launch the prostate cancer test in the second quarter of this year. It will target a market opportunity of around 120,000 patients in the US, they added.

For 2013, Genomic Health guided to revenues of between $258 million and $266 million. It expects to post anywhere from a $.12 loss per share to a profit of $.08 per share on a GAAP basis. On a non-GAAP basis, excluding stock compensation expenses, the firm guided to EPS of between $.48 and $.68.

It anticipates delivering between 82,000 and 84,000 Oncotype DX test results in the year.

"In 2013, we plan to continue to invest in near-term opportunities to expand our global breast and colon cancer businesses in order to drive top-line revenue growth, and in our prostate cancer launch to build long-term value, and expect losses in the first and second quarters," Dean Schorno, CFO of Genomic Health, said in the statement.

Popovits added on the call that the firm plans to "expand our penetration in invasive breast cancer by addressing the two in five eligible women in the US who today are not getting an Oncotype DX recurrence score to personalize their treatment; secure reimbursement for the DCIS score, which represents a new market with more than 50,000 patients in the US alone; and broaden private payor coverage for our colon cancer test."

She also said Genomic Health would continue to target increased adoption and reimbursement in international markets, "where we are currently less than 5 percent penetrated and gaining significant traction."

In Thursday morning trade on the Nasdaq shares of Genomic Health were up 1 percent at $28.94.

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