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Foundation Medicine's Q1 Revenues More than Double

NEW YORK (GenomeWeb News) – Foundation Medicine reported after the close of the market Wednesday that its first quarter revenues rose 121 percent from the first quarter of 2013 and 19 percent sequentially, driven by sales of its FoundationOne and FoundationOne Heme cancer tests.

The Cambridge, Mass.-based cancer genomic analysis firm reported total revenues of $11.5 million for the three months ended March 31, up from $5.2 million in Q1 2013 and $9.7 million in Q4 2013. It beat the consensus Wall Street estimate of $11.3 million.

Revenue from clinical testing in the first quarter was $7.1 million, a 209 percent increase in clinical revenue from $2.3 million in the year-ago quarter and 34 percent growth from the prior quarter of $5.3 million. Revenue from its biopharmaceutical business was $4.3 million in Q1, a 47 percent year-over-year increase from $2.9 million, and on par with $4.4 million in prior quarter.

Foundation Medicine reported 4,702 clinical tests in the first quarter, up from 3,752 in the fourth quarter of 2013 and "over four times the volume" from the same quarter last year, SVP of Finance Jason Ryan noted during a conference call discussing the company's first quarter results.

Of those tests, 715 were the FoundationOne Heme test, which the company launched last December. The company is receiving average reimbursement of $3,400 per test, Ryan said.

"The first quarter was a strong start to 2014 for Foundation Medicine, as we drove 25 percent quarter-over-quarter growth in the number of clinical tests reported to physicians, and in particular, saw early success with the adoption of our second clinical product, FoundationOne Heme," President and CEO Michael Pellini said in a statement. "To meet the increasing demand in the clinical and pharmaceutical business areas, we are continuing to invest in our commercial and business development infrastructure and expanding our experienced sales force."

Foundation now has a sales force of 43 and plans to increase that to between 45 and 50 sales people by the end of the year. In addition, it has three professionals dedicated to international sales and expects to at least double its international sales team by the end of the year.

Foundation Medicine posted a net loss of $12.2 million, or $.44 per share, for Q1 2014, compared to a net loss of $7.2 million, or $2.56 per share, in Q1 2013. The loss per share beat the $.48 expected by Wall Street analysts.

Its Q1 R&D expenses were $6.9 million, up from $5 million in Q1 2013. The firm's SG&A costs were $11.4 million, up from $5 million a year ago.

Foundation Medicine also said it has expanded a collaboration with Clovis Oncology that began in 2012 to develop an in vitro diagnostic test to identify cancer patients who may best respond to Clovis' PARP inhibitor drug rucaparib.

The expanded agreement now includes the development of a multi-gene next-generation sequencing-based companion diagnostic test and will include development and regulatory milestone payments that will fund the building of a new lab that meets US Food and Drug Administration regulations and the costs of seeking premarket approval. "We view this expanded agreement with Clovis as an important step away from the traditional marker CDx test towards a universal companion diagnostic that can address the increasing number of targeted therapies in development for complex genomic signatures," Pellini said.

Foundation Medicine also reiterated previous goals of reporting between 22,000 and 25,000 tests in 2014, including both its FoundationOne and FoundationOne Heme tests, and of generating revenues in the range of $52 million to $58 million.

In the first half of 2014, the company plans to launch an updated version of its FoundationOne test with an expanded set of genes for solid tumors, and in the second half of the year it plans to add new features to the Interactive Cancer Explorer physician portal.

As of March 31, the company had $110.3 million in cash and cash equivalents.

In Thursday morning trade on the Nasdaq, shares of Foundation Medicine were down 6 percent at $26.31.