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Genomic Health Reports 19 Percent Revenue Growth for Q4, FY 2010

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Genomic Health reported after the close of the market Tuesday that its fourth-quarter revenues increased 19 percent, as it posted a profit for both the quarter and full year.

The Redwood City, Calif.-based molecular diagnostics firm brought in total revenues of $47.1 million for the three-month period ended Dec. 31, compared to revenues of $39.6 million for Q4 2009. Revenues were driven by a 14 percent year-over-year increase in OncoType Dx test results delivered to 15,180, compared to 13,340 delivered in Q4 2009.

Analysts' consensus estimate for Q4 2010 was $47.2 million.

Genomic Health posted a profit for the third straight quarter. Its net income was $1.7 million, or $.06 per share, compared to a net loss of $341,000, or $.01 per share, for the fourth quarter of 2009. It matched Wall Street expectations on the bottom line.

The firm's R&D spending for the quarter increased 7 percent to $9.3 million from $8.7 million, while its SG&A expenses jumped 22 percent to $27.8 million from $22.7 million.

For full-year 2010, Genomic Health posted revenues of $178.1 million, an increase of 19 percent over revenues of $149.5 million for 2009. The firm matched analysts' expectations.

Its net income for the year was $4.2 million, or $.14 per share, compared to a net loss of $9.4 million, or $.33 per share, for 2009.

R&D spending for the year was $33.2 million, down 7 percent from $35.7 million, and SG&A spending increased 17 percent to $106.3 million from $90.7 million.

Genomic Health finished the year with $31.2 million in cash and cash equivalents, plus $45.6 million in short-term investments.

The firm said it expects to bring in revenues of between $200 million and $210 million in 2011, with full-year net income of between $3 million and $5 million.

"In 2011, we plan to continue to make significant investments in the global expansion of both our breast and colon cancer franchises, and in our pipeline, including the acceleration of our prostate cancer program and next generation sequencing," Genomic Health President and CEO Kim Popovits said in a statement.

Early last month, Genomic Health said that it has accelerated development of its prostate cancer test with the goal of launching it in 2013, a year earlier than it had previously estimated. The firm made the decision based on study results presented in December at the Society for Urologic Oncology annual meeting, which identified 295 genes that were "strongly associated" with clinical recurrence in that population.

The prostate cancer test would be the firm's third, after its Oncotype Dx breast cancer and colon cancer tests.

In early Wednesday trade on the Nasdaq, shares of Genomic Health were down 5 percent at $22.12.

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