This article has been updated with information and comments from Foundation Medicine's earnings call.
NEW YORK (GenomeWeb) – Foundation Medicine reported a 39 percent increase in fourth quarter revenues after the close of market on Tuesday, driven by strong growth from its pharmaceutical business.
The Cambridge, Massachusetts-based firm booked $26.1 million in fourth quarter revenues, up from $18.7 million a year ago, and narrowly beating the consensus Wall Street estimate of $25.8 million.
Of the total revenues, $12 million derived from clinical testing, up 17 percent from $10.3 million a year ago but down 13 percent sequentially, and $14.1 million from pharmaceutical customers, a 68-percent year-over-year increase and a 20 percent increase from Q3. The clinical revenue decrease compared to the third quarter was expected, CFO Jason Ryan explained during a conference call to discuss the financial results, and resulted from decreased test volumes in Q3.
Foundation Medicine ran 8,286 clinical tests in the fourth quarter, 15 percent more than during the same period last year and 3 percent more than in Q3, including 7,382 FoundationOne and 904 FoundationOne Heme tests. Similar to prior periods, the average reimbursement per clinical test was approximately $3,200. The firm also reported 3,104 test results to its pharmaceutical customers.
The company's cancer knowledgebase, FoundationCore, grew to more than 68,000 clinical cases from 60,000 at the end of the third quarter.
Foundation's net loss for the fourth quarter climbed to $19.0 million, or $.55 per share, from $13.3 million, or $.47 per share, in the year-ago quarter. The company beat analysts' average net loss estimate of $.67 per share.
The firm's R&D expenses for the quarter totaled $12.8 million, up from $7.8 million in Q4 of 2014. Its SG&A expenses increased to $21.2 million from $17.2 million in last year's fourth quarter.
"As we look ahead to 2016, we are poised for continued growth and expect to drive value both near and long term through product innovation, commercial execution, and further integration of our molecular information platform to enable precision medicine," said Foundation Medicine CEO Michael Pellini in a statement.
As previously reported, the company expects revenues in the range of $110 million to $120 million for 2016, a midpoint increase of 23 percent over 2015, and to deliver between 37,000 and 40,000 FoundationOne and FoundationOne Heme clinical tests, a midpoint increase of 17 percent. "We do expect our pharma revenue in particular to drive top-line growth over the near term as we deepen and expand our pharma partnerships," Ryan said.
It still plans to launch its ctDNA assay, FoundationAct, which it described earlier this month at the Advances in Genome Biology and Technology meeting in Orlando, Florida, during the current quarter after launching the test for research use by its pharma partners in December. However, the firm is not yet including revenue from FoundationAct in its 2016 guidance.
For full-year 2015, Foundation Medicine reported 53 percent year-over-year revenue growth to $93.2 million from $61.1 million in 2014, and edging out analysts' consensus estimate of $92.9 million.
Full-year revenues from clinical testing were $49.2 million, a 34 percent increase over 2014, and revenues from pharmaceutical partners totaled $44 million, an 80 percent increase. "We believe this continued growth [from pharma partners] demonstrates that our biopharma business is not simply a short-term byproduct of the clinical business," Pellini said during the call. "Rather, it is an integral and synergistic component of our overall business with a market opportunity that is both significant and growing."
The firm reported 32,998 clinical tests in 2015, 36 percent more than in 2014, among them 29,076 FoundationOne and 3,922 FoundationOne Heme tests.
"As we think about our clinical business in 2015, it’s clear we faced market challenges that impacted utilization and volume," Pellini said, adding that the firm countered these by strengthening its commercial organization, taking efforts to educate physicians, and expanding decision-support tools.
The company's net loss grew to $89.6 million, or $2.73 per share, for the year, from $52.2 million, or $1.87 per share, the previous year. Analysts had, on average, estimated a net loss of $2.90 per share.
The firm's R&D expenses grew to $43.9 million in 2015, up from $30.6 million in 2014. Its SG&A expenses increased to $99.6 million from $56.3 million in 2014.
Foundation Medicine finished the year with approximately $117.8 million in cash and cash equivalents, and $89.6 million in marketable securities.