- Product Revenue Increased 78 Percent Compared with 2007 - - Net Loss Narrows -
REDWOOD CITY, Calif., Nov. 5 /PRNewswire-FirstCall/ -- Genomic Health,
Inc. (Nasdaq: GHDX) today reported financial results and business progress for
the quarter ended September 30, 2008.
Total revenue increased to $28.1 million in the third quarter of 2008
compared with $15.9 million in the third quarter of 2007. Product revenue
from the Oncotype DX(R) breast cancer assay was $28.1 million in the third
quarter of 2008, an increase of 78 percent, compared with $15.8 million in the
third quarter of 2007.
Net loss decreased to $3.0 million in the third quarter of 2008, compared
with $7.3 million in the third quarter of 2007. Basic and diluted net loss
per share was $0.11 in the third quarter of 2008, compared with a net loss per
share of $0.26 in the third quarter of 2007.
Cash and cash equivalents and short-term investments at September 30, 2008
were $54.4 million compared with $60.6 million at June 30, 2008, and $68.4
million at December 31, 2007.
"We believe personalized medicine has the power to improve the quality of
care while reducing costs, which is especially important during a time of
soaring health care expenses and economic uncertainty," said Randy Scott,
Ph.D., Chairman and Chief Executive Officer of Genomic Health. "This quarter,
we again increased the value of Oncotype DX by the inclusion of quantitative
HER2 scores, while continuing to invest in our commercial organization here
and abroad. We believe the growing use of our Oncotype DX breast cancer
assay, our narrowing net loss, and our strong balance sheet attest to the
strength of our business model as we deliver the promise of genomics into the
practice of medicine."
Additional Third Quarter 2008 Financial Results
The majority of product revenue, approximately 52 percent, was recorded on
an accrual basis and recognized at the time the test results were delivered
during the third quarter of 2008, reflecting established payment patterns from
payors with coverage policies in place.
Total operating expenses were $31.4 million in the third quarter of 2008,
compared with $24.0 million for the third quarter of 2007. Included in third
quarter 2008 operating expenses were non-cash charges of $3.6 million,
including $2.3 million of stock-based compensation expense, compared with $1.6
million in the same period in 2007, and $1.3 million of depreciation and
amortization expenses, compared with $1.0 million in the same period in 2007.
Financial Results for Nine Months Ended September 30, 2008
Total revenue for the nine months ended September 30, 2008 was $79.3
million, compared with $44.7 million for the first nine months of 2007.
Product revenue for the nine months ended September 30, 2008 was $77.8
million, compared with $43.5 million for the first nine months of 2007.
Contract revenue constituted the balance of revenue for the first nine months
of 2008 and 2007.
Net loss for the nine months ended September 30, 2008 was $13.8 million,
compared with $21.3 million for the first nine months of 2007. Basic and
diluted net loss per share was $0.49 for the nine months ended September 30,
2008, compared with a net loss per share of $0.81 for the first nine months of
2007.
Total operating expenses for the nine months ended September 30, 2008 were
$94.2 million, compared with $67.6 million for the comparable period in 2007.
The increase in expenses includes non-cash charges of $10.5 million, including
stock-based compensation expense of $6.9 million in the first nine months of
2008 compared with $4.5 million for the same period in 2007, and $3.6 million
of depreciation and amortization expenses, compared with $2.9 million in the
same period in 2007.
Recent Highlights and Accomplishments
Commercial Progress
-- More than 10,220 test results delivered in the third quarter of 2008,
compared with more than 5,950 test results delivered in the third
quarter of 2007, an increase of 72 percent year-over-year.
-- More than 75,000 Oncotype DX test results have been delivered to
patients.
-- Gained coverage for an additional 7.9 million lives for reimbursement
of Oncotype DX through contracts, policies and agreements, bringing the
total U.S. covered lives to approximately 89 percent of insured lives
including: Coventry Health Care (4.4 million lives), Blue Cross and
Blue Shield of Massachusetts (1.3 million lives), Medica Health Plans,
HMSA Blue Cross Blue Shield of Hawaii, and WPS Health Insurance in
Wisconsin.
-- Named a Vice President to oversee European markets.
-- Established distribution agreements in Australia and Taiwan.
-- Received test samples from 39 countries to date.
-- Oncotype DX included in the updated 2008 guidelines of the Dutch
Institute for Healthcare Improvement.
Product Pipeline
-- Enhanced clinical utility of Oncotype DX reports by including
quantitative HER2 scores; quantitative estrogen receptor and
progesterone receptor scores were added earlier this year.
-- Completed European study using Oncotype DX in node-negative and
node-positive, breast cancer patients treated with aromatase
inhibitors, which was accepted for oral presentation at the San Antonio
Breast Cancer Symposium in December 2008.
-- Continued to make progress toward a clinical validation study in colon
cancer, with the goal of reporting results in 2009.
Peer-Reviewed Publications and Medical Meeting Presentations
-- Two abstracts were accepted for oral presentation at the San Antonio
Breast Cancer Symposium in December 2008:
-- "Risk of distant recurrence using Oncotype DX in postmenopausal
primary breast cancer patients treated with anastrozole or
tamoxifen: a TransATAC study"
-- "GRB7-dependent pathways are potential therapeutic targets in
triple-negative breast cancer"
-- The American Journal of Surgery published results of a study showing
Oncotype DX changed treatment recommendations in 44 percent of node-
negative, estrogen receptor-positive breast cancer patients.
-- Presented results from two studies supporting the use of Oncotype DX in
assessing HER2 gene expression at the ASCO Breast Cancer Symposium in
September.
-- Independent researchers presented results from a small study of
Japanese women demonstrating that the Oncotype DX Recurrence Score(R)
result may predict response to neoadjuvant endocrine therapy including
tamoxifen and anastrozole at the ASCO Breast Cancer Symposium in
September.
Conference Call Details
To access the live conference call today, November 5, at 4:30 p.m. Eastern
Time via phone, please dial (877) 356-8064 from the United States and Canada
or (706) 758-4314 internationally. The conference ID is 71000165. Please dial
in approximately ten minutes prior to the start of the call. A telephone
replay will be available beginning approximately one hour after the call
through November 12 and may be accessed by dialing (800) 642-1687 from the
United States and Canada or (706) 645-9291 internationally. The replay
passcode is 71000165.
To access the live and subsequently archived webcast of the conference
call, go to the Investor Relations section of the company's Web site at
http://investor.genomichealth.com. Please connect to the web site at least 15
minutes prior to the call to allow for any software download that may be
necessary.
About Genomic Health
Genomic Health, Inc. (Nasdaq: GHDX) is a life science company focused on
the development and commercialization of genomic-based clinical laboratory
services for cancer that allow physicians and patients to make individualized
treatment decisions. In 2004, Genomic Health launched its first test, Oncotype
DX(R), which has been shown to predict the likelihood of breast cancer
recurrence and the likelihood of chemotherapy benefit in a large portion of
early-stage breast cancer patients. The company was founded in 2000 and is
located in Redwood City, California. For more information, please visit
http://www.genomichealth.com.
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, including statements
relating to our beliefs regarding the ability of personalized medicine to
improve the quality of healthcare while reducing costs; the components of
future growth, if any, in our business; our belief that including quantitative
HER2 scores increases the value of Oncotype DX; our beliefs regarding
continued investment in our commercial organization domestically and abroad;
our beliefs regarding the strengths of our business model; the outcome or
success of planned or ongoing clinical trials and our expectations regarding
potential clinical outcomes; and the applicability of clinical study results
to actual outcomes. Forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially, and
reported results should not be considered as an indication of future
performance. These risks and uncertainties include, but are not limited to:
our ability to increase usage of our test; the risk that we may not obtain or
maintain sufficient or increasing levels of reimbursement for our existing
test and any future tests we may develop; our ability to continue to narrow
our net loss; the risks and uncertainties associated with the regulation of
our tests by FDA; our ability to compete against third parties; our ability to
develop and commercialize new tests; the results of clinical trials;
unanticipated costs or delays in research and development efforts; our ability
to obtain capital when needed; our history of operating losses; the results of
clinical studies and the other risks set forth in our filings with the
Securities and Exchange Commission, including the risks set forth in our
Quarterly Report on Form 10-Q for the quarter ended June 30, 2008. These
forward-looking statements speak only as of the date hereof. Genomic Health
disclaims any obligation to update these forward- looking statements.
NOTE: The Genomic Health logo, Oncotype, Oncotype DX and Recurrence Score
are trademarks or registered trademarks of Genomic Health, Inc. All other
trademarks and service marks are the property of their respective owners.
Genomic Health, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2008200720082007
(Unaudited)(Unaudited)
REVENUES:
Product revenues $28,070 $15,781 $77,752 $43,482
Contract revenues 51 120 1,592 1,197
Total revenues 28,121 15,901 79,344 44,679
OPERATING EXPENSES:
Cost of product revenues7,140 4,398 19,875 12,417
Research and development6,939 5,643 20,667 16,037
Selling and marketing 10,837 9,484 35,030 26,377
General and administrative 6,505 4,488 18,635 12,763
Total operating expenses 31,421 24,013 94,207 67,594
Loss from operations (3,300) (8,112)(14,863)(22,915)
Other income (expense):
Interest income 369 1,021 1,438 2,149
Interest and other expense(91) (162) (330) (535)
Net loss ($3,022)($7,253) ($13,755) ($21,301)
Basic and diluted net
loss per share($0.11) ($0.26) ($0.49) ($0.81)
Shares used in computing
basic and diluted net
loss per share28,331,505 28,119,786 28,270,776 26,287,177
Genomic Health, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
September 30, December 31,
2008 2007
(Unaudited)(Audited)
Cash and cash equivalents $9,459$39,164
Short-term investments44,965 29,196
Accounts receivable, net 9,423 5,089
Prepaid expenses and other current assets 6,013 3,105
Total current assets 69,860 76,554
Property and equipment, net 14,583 10,412
Restricted cash 504500
Other assets 564463
Total assets $85,511$87,929
Accounts payable $1,448 $1,966
Accrued expenses and other current liabilities 9,947 7,616
Deferred revenue 4,117 1,008
Notes payable, current 2,163 2,687
Notes payable, long-term 531 2,039
Other liabilities 1,814 1,447
Stockholders' equity 65,491 71,166
Total liabilities and stockholders' equity $85,511$87,929
The condensed consolidated balance sheet at December 31, 2007 has been
derived from the audited consolidated financial statements at that date
included in the Company's Form 10-K for the fiscal year ended
December 31, 2007.
SOURCE Genomic Health, Inc.
