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Genomic Health's Revenues Rise 22 Percent; Slashes Loss

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Genomic Health reported after the close of the market Wednesday that its first-quarter revenues rose 22 percent, while it cut its net loss 58 percent.

The Redwood City, Calif.-based pharmacogenomics test maker brought in total revenues of $41.2 million for the three-month period ended March 31, compared to $33.9 million for the first quarter of 2009. It fell short of analysts' consensus estimate of $43.4 million for the quarter.

Genomic Health said that it delivered 13,310 OncoTypeDX breast cancer tests during the quarter, nearly flat with 13,330 delivered in the fourth quarter of 2009, and up from 11,210 in the first quarter of 2009.

"The consistent level of tests delivered quarter-over-quarter reflects a decline in US node-negative breast cancer tests offset by the delivery of twice as many node-positive breast cancer tests and continued strong international growth," Kim Popovits, president and CEO of Genomic Health, said in a statement.

She added during a conference call following the release of the results, "We believe prolonged high unemployment levels were the primary driver of this result. However, we also note that our focus in the quarter on the launch of our colon cancer test and communication of node-positive data shifted our promotional focus away from the node-negative population."

Popovits noted that the firm also delivered more than 50 percent more tests internationally during the quarter compared to Q1 2009. "This encouraging progress as we expand to reach a market that is nearly double that of the United States," she said.

Genomic Health officials noted that the firm realized $1.3 million of the roughly $2.5 million in delayed payments from Anthem Insurance Companies and the Blue Card program administered by Blue Shield of California that had negatively impacted its Q4 2009 results.

The firm's net loss dropped sharply to $1.9 million, or $.07 per share, from $4.6 million, or $.16 per share. Analysts, on average, had expected a loss per share of $.03.

Its R&D expenses declined 9 percent to $7.8 million from $8.6 million, while its SG&A spending increased 20 percent to $26.3 million from $22 million.

Genomic Health finished the quarter with $8.1 million in cash and cash equivalents and $49.6 million in short-term investments.

The company expects its full-year 2010 revenues to be between $180 million and $190 million, with full-year net income of up to $2 million.

"While we expect the economy to present ongoing challenges in both the US and Europe, we believe that with our profitable breast cancer franchise we have the essential resources to expand the use of our OncoType DX test to patients around the world and to develop new diagnostics to individualize treatment for multiple types of cancer," said Popovits.

In early Thursday trade on the Nasdaq, Genomic Health's shares were down less than 1 percent at $15.97.

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