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Foundation Medicine Doubles Q3 Revenues

NEW YORK (GenomeWeb) – Foundation Medicine reported after the close of the market on Wednesday that its third quarter revenues jumped 100 percent year over year and the number of clinical tests reported grew 149 percent.

The Cambridge, Mass.-based cancer genomic analysis firm reported total revenues of $16.4 million for the three months ended Sept. 30, up from $8.2 million in Q3 2013 and $14.5 million in Q2 2014. It beat the consensus Wall Street estimate for revenues of $15.7 million.

During a conference call discussing Foundation Medicine's third quarter performance, President and CEO Michael Pellini also announced that beginning Jan. 1, Google employees will have covered access to FoundationOne and FoundationOne Heme.

Foundation Medicine reported 6,428 clinical tests in the third quarter of 2014, generating $9.8 million in revenue, compared to $4.4 million in the year ago quarter and $9.4 million in Q2 2014. Clinical tests reported included 5,392 FoundationOne tests and 1,036 FoundationOne Heme tests.

Consistent with the previous quarter, approximately 60 percent of tests were ordered from community oncologists and the average per-test reimbursement rate was $3,600.

In addition, Foundation Medicine reported 1,465 tests to its pharmaceutical partners. Revenue from that business segment grew 75 percent year over year to $6.7 million from $3.8 million and 31 percent sequentially from $5.1 million.

"Revenue contribution from our pharmaceutical industry partnerships was particularly strong, which highlights one aspect of our diversified revenue streams," Pellini said in a statement. "As our clinical business expands further into the community setting, we are learning more about our clients' needs and are developing programs to expand access to our testing."

The company noted that updated guidelines issued last week by the National Comprehensive Cancer Network endorsing molecular profiling for most patients diagnosed with Stage IV non-small cell lung cancer, as well as the coverage decision by Priority Health for FoundationOne and FoundationOne Heme, were particularly important milestones in the quarter.

"These are important steps forward in delivering precision medicine to many more patients with cancer and underscore the rapidly evolving impact of comprehensive genomic profiling in cancer care," Vincent Miller, Foundation Medicine's chief medical officer, said in a statement.

As a result of the quarterly performance, company management has updated the firm's 2014 guidance. It is predicting that reported clinical tests will fall within the upper end of its initial guidance in the range of 22,000 to 25,000, and that it will achieve revenue in the range of $58 million to $60 million, higher than its previous prediction of $52 million to $58 million.

The firm's net loss for the quarter was $13.0 million, or $.46 per share, compared to a loss of $12.5 million in the Q3 2013, or $3.51 per share. It beat analysts' average estimate for a loss of $.49 per share.

Foundation Medicine's R&D expenses were $7.2 million, up 3 percent from $7 million in the previous year's third quarter, while SG&A spending was $14.7 million, up 55 percent from $9.5 million in Q3 2013.

As of Sept. 30, the company had $86.7 million in cash and cash equivalents.

Shares of Foundation Medicine were down around 6 percent at $25.87 in Thursday morning trade on the Nasdaq.