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As Test Volumes Grow, Foundation Medicine Welcomes FDA Regulation of LDTs


NEW YORK (GenomeWeb) – Sales of Foundation Medicine's next-generation sequencing-based tumor profiling tests are growing both among its clinical and pharmaceutical customers, the company said this week, leading to a 145 percent growth in its second quarter revenues to $14.5 million from $5.9 million in Q2 2013.

The company reported 5,908 clinical tests in the second quarter of 2014, including 4,960 FoundationOne tests and 948 FoundationOne Heme tests, an increase of 263 percent from the 1,626 tests reported in Q2 2013, and a 26 percent increase from the 4,702 tests reported in the first quarter

Notably, the company is making inroads within the community oncology setting — around 60 percent of tests that it ran in the second quarter of 2014 were for community oncologists, many of whom were repeat customers. That is up from 54 percent in the previous quarter and 50 percent one year ago, CEO Michael Pellini said during a conference call discussing the firm's second quarter results. For Foundation Medicine's complete Q2 2014 financial results, see the GenomeWeb Daily News story, here.

On the regulatory front, Pellini said that increased oversight by the US Food and Drug Administration would actually be a boon for Foundation Medicine. The FDA last month announced that it plans to regulate laboratory-developed tests and will phase in a risk-based approach for doing so over the next decade.

"We welcome the adoption of rigorous standards where life altering treatment decisions can be made based on the results of these tests," Pellini said, adding that the company is "confident that FDA oversight in our space will further improve our competitive advantage and differentiation in the marketplace, given the extremely high standards we have already set for comprehensive genomic profiling in oncology."

Pellini said that Foundation Medicine designed its tests in anticipation of increased FDA oversight of LDTs and said that the tests are "fully comprehensive, thoroughly validated, and backed by peer-reviewed publications."

In addition, the company has already been working with the FDA through its involvement in a biomarker-driven, multi-drug, multi-center Phase II/III registration trial for patients with squamous cell carcinoma called the Lung Cancer Master Protocol, or Lung-MAP. The trial kicked off in June, and will involve using the FoundationOne test to screen patients. Based on the results, the group will either randomize patients to one of five treatment arms or to a control arm matched to each drug.

Foundation Medicine is also building a laboratory that meets FDA quality system regulations as part of an agreement it announced in May with Clovis Oncology to develop a multi-gene NGS-based companion diagnostic test for Clovis' PARP inhibitor drug rucaparib. Pellini said that the lab should be completed in 2015, and would also enable the company to develop other products that it could submit for FDA clearance.


The company said that it is continuing to make progress on the reimbursement front. Average per-test reimbursement increased by $200 to $3,600, Jason Ryan, senior vice president of finance, said during the call. That increase was driven primarily by FoundationOne Heme, Ryan said, which has a list price of $7,200, compared to FoundationOne's list price of $5,800.

It has still not received payment from Medicare, and Ryan said that although the company is appealing, it has "conservative expectations" for obtaining payment on tests already run.

Looking ahead, COO Steven Kafka said that last month's decision by the New York State Department of Health to approve both tests for residents of New York State would have a positive impact on reimbursement.

The New York State approval should "check the box for analytic validation," Pellini added, and is "another piece in the process as we continue to build evidence" for payors.