REDWOOD CITY, Calif.,
Nov. 8, 2017 /PRNewswire/
-- Genomic Health, Inc. (NASDAQ: GHDX) today
reported financial results and business progress for the quarter
ended September 30, 2017.
Total revenue was $83.8 million in
the third quarter of 2017, compared with $82.3 million in the third quarter of 2016, an
increase of 2 percent. Revenue was negatively impacted by
approximately $3 million due to the
hurricane disruption in certain regions of the United States.
U.S. product revenue was $70.9
million in the third quarter of 2017, compared with
$70.0 million in the third quarter of
2016. U.S. invasive breast revenue from Oncotype DX Breast
Recurrence Score® tests was $63.1
million in the third quarter of 2017, compared with
$64.6 million in the third quarter of
2016. U.S. prostate revenue from Oncotype DX® Genomic
Prostate Score™ (GPS™) tests was $5.5
million in the third quarter of 2017, compared with
$2.3 million in the third quarter of
2016.
International product revenue was $12.9
million in the third quarter of 2017, compared with
$12.1 million in the third quarter of
2016, an increase of 7 percent.
"In the third quarter, we generated solid results including a 2
percent increase in revenue and a 5 percent increase in test
volume, despite disruption in U.S. regions affected by hurricanes.
We also reported a net loss of $2.2
million, and on a non-GAAP basis delivered a $1.1 million profit in the third quarter.
Importantly, we expect to deliver full-year profit, excluding
transaction costs from our collaboration with Biocartis,"
said Kim Popovits, chairman of the board, chief executive
officer and president of Genomic Health. "We look forward to
significant revenue drivers in 2018 including a new higher Medicare
rate under PAMA and anticipated TAILORx results, while we expand
our business model to increase worldwide access through the
development of an in vitro diagnostic, or IVD, version of the
Oncotype DX breast cancer test."
More than 31,580 Oncotype™ test results were delivered in the
third quarter of 2017, an increase of 5 percent, compared with more
than 29,990 test results delivered in the same period in 2016. U.S.
test volume was negatively impacted by approximately 3 percent due
to the hurricane disruption in certain regions of the country.
Oncotype DX Breast Recurrence Score tests delivered in the U.S.
were consistent with the third quarter of the prior year. Oncotype
DX Genomic Prostate Score tests delivered in the U.S. grew 39
percent compared with the third quarter of the prior year.
International tests delivered grew 14 percent compared with the
same period of the prior year and represented approximately 26
percent of total test volume in the third quarter of 2017.
Operating loss for the third quarter of 2017 improved to
$2.6 million, compared with
$3.0 million for the third quarter of
2016. Net loss was $2.2 million, or
$0.06 per share, for the third
quarter of 2017, compared with a net loss of $2.8 million, or $0.08 per share, for the third quarter of 2016.
Basic and diluted net loss per share was $0.06 for the third quarter of 2017, compared
with basic and diluted net loss per share of $0.08 for the third quarter of 2016.
Total revenue for the nine months ended September 30, 2017 was $253.3 million compared with $245.1 million for the nine months ended
September 30, 2016, an increase of 3
percent. On a constant currency basis, revenue increased 4 percent
compared with the same period in the prior year.i
International product revenue was $39.4
million for the nine months ended September 30, 2017, compared with $34.8 million for the nine months ended
September 30, 2016, an increase of 13
percent, and an increase of 16 percent on a constant currency
basis.i
Operating loss improved to $8.6
million for the nine months ended September 30, 2017, compared with an operating
loss of $16.9 million for the nine
months ended September 30, 2016.
Net loss was $5.7 million, or
$0.17 per share, for the nine months
ended September 30, 2017, compared
with a net loss of $15.3 million, or
$0.46 per share, for the nine months
ended September 30, 2016.
Cash and cash equivalents and short-term marketable securities
at September 30, 2017 were
$119.0 million, compared with
$97.0 million at December 31, 2016 which included the fair value
of the company's investment in a marketable security of
$9.3 million at December 31, 2016.
The non-GAAP financial measures used adjust for specified items
that can be highly variable or difficult to predict. A
reconciliation of the non-GAAP financial measures to the most
directly comparable GAAP financial measures is included in the
tables accompanying this release.
2017 Financial Outlook
- The company expects to deliver full-year profit, excluding the
$3.2 million cost of the Biocartis
transaction.
- The company expects to meet the low end of its full year
revenue guidance, which is $345
million, excluding the estimated hurricane impact on revenue
of approximately $3 million in the
third quarter.
Recent Business Highlights
- Palmetto GBA, a Medicare Administrative Contractor (MAC) that
assesses molecular diagnostic technologies, issued a positive final
Local Coverage Determination (LCD) that became effective on
October 9, 2017 to expand Medicare
coverage of the Oncotype DX Genomic Prostate Score test to
qualified patients with favorable intermediate-risk prostate cancer
throughout the U.S.
- Established additional private coverage for the Oncotype DX
Genomic Prostate Score test, bringing the total number of U.S.
covered lives to more than 66 million.
- Established new private coverage for the Oncotype DX Breast
Recurrence Score test in Germany,
bringing the total number of German private covered lives to 15
million.
- Announced an exclusive agreement with Biocartis Group NV to
develop an IVD version of the Oncotype DX Breast Recurrence Score
test on Biocartis' Idylla platform that can be performed locally by
laboratory partners and in hospitals around the world to broaden
future global patient access.
- European Urology published results from a large,
community-based, multi-center clinical validation study conducted
at Kaiser Permanente. The results confirmed that the Oncotype DX
GPS test is a strong independent predictor of prostate
cancer-specific death and metastases at 10 years in men with
localized prostate cancer.
- Presented results from four studies that provide additional
evidence of the unmatched value of the Oncotype DX Breast
Recurrence Score test in accurately predicting outcomes in
early-stage breast cancer patients at the European Society for
Medical Oncology (ESMO) 2017 Congress.
- Nature Partner Journals Breast Cancer, a peer-reviewed
journal published by Nature, published two articles
highlighting results from a large prospectively designed registry
conducted by Clalit Health Services, the largest Health Maintenance
Organization in Israel. The
results reinforce the ability of the Oncotype DX Breast Recurrence
Score test to predict clinical outcomes in both node-negative and
node-positive patients.
- Received acceptance to present nine studies at the 2017 San
Antonio Breast Cancer Symposium (SABCS) in December.
Conference Call Details
To access the live conference call today, November
8, at 4:30 p.m. Eastern Time via phone, please dial
(877) 303-7208 from the United States and Canada, or
+1 (224) 357-2389 internationally. The conference call ID is
5697809. Please dial in approximately ten minutes prior to the
start of the call. 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 presentation to allow for any
software download that may be necessary.
About Genomic Health
Genomic Health, Inc. (NASDAQ: GHDX) is the world's leading provider
of genomic-based diagnostic tests that help optimize cancer care,
including addressing the overtreatment of the disease, one of the
greatest issues in healthcare today. With its Oncotype
IQ® Genomic Intelligence Platform, the company is
applying its world-class scientific and commercial expertise and
infrastructure to lead the translation of clinical and genomic big
data into actionable results for treatment planning throughout the
cancer patient journey, from diagnosis to treatment selection and
monitoring. The Oncotype IQ portfolio of genomic tests and services
currently consists of the company's flagship line of Oncotype
DX® gene expression tests that have been used to guide
treatment decisions for more than 800,000 cancer patients
worldwide. Genomic Health is expanding its test portfolio
to include additional liquid- and tissue-based tests, including the
recently launched Oncotype SEQ® Liquid
Select™ test. The company is based in Redwood
City, California, with international headquarters
in Geneva, Switzerland. For more information, please
visit, www.GenomicHealth.com and follow the company on
Twitter: @GenomicHealth, Facebook, YouTube and LinkedIn.
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements relating to the company's beliefs
regarding its future performance, including achieving its financial
guidance for the full year 2017; the commercial performance of its
tests; the ability of new Medicare rates under PAMA to result in
additional revenue in 2018; the favorable impact of TAILORx results
on revenue in 2018; the estimated impact of the recent hurricanes
on the company's business; the attributes and focus of the
company's product pipeline; the ability of any potential tests the
company may develop to optimize cancer treatment; the ability
of the company to develop and commercialize, and collaborate with
third parties to commercialize, additional tests in the future; and
the ability of the Company to increase worldwide access through the
development of an in vitro diagnostic version of its tests.
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: the risk that the company may not achieve its 2017
guidance estimates and the assumptions underlying such guidance;
the risks and uncertainties associated with the regulation of the
company's tests; the results of clinical studies and their impact
on reimbursement and adoption; the applicability of clinical study
results to actual outcomes; the company's ability to develop and
commercialize new tests and expand into new markets domestically
and internationally; the commercial success of any collaborations
entered into by the company; the risk that the company may not
obtain or maintain sufficient levels of reimbursement, domestically
or abroad, for its existing tests and any future tests it may
develop; the risks of competition; unanticipated costs or delays in
research and development efforts; the company's ability to obtain
capital when needed and the other risks set forth in the company's
filings with the Securities and Exchange Commission, including the
risks set forth in the company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 2017.
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,
Recurrence Score, DCIS Score, Oncotype SEQ, Liquid Select, Genomic
Prostate Score, GPS Oncotype DX AR-V7 Nucleus Detect and Oncotype
IQ are trademarks or registered trademarks of Genomic Health, Inc.
All other trademarks and service marks are the property of their
respective owners.
i Constant currency is a non-GAAP measure that is
calculated by comparing the company's quarterly average foreign
exchange rates for the nine months ended September 30, 2017. The constant currency
disclosures take current local currency revenue and translate it
into U.S. dollars based upon the foreign currency exchange rates
used to translate the local currency revenue for the applicable
comparable period in the prior year, rather than the actual
exchange rates in effect during the current period. It does not
include any other effect of changes in foreign currency rates on
the company's results or business. The company believes this
non-GAAP financial measure is useful to investors in assessing the
operating performance of the business. This non-GAAP measure should
not be considered in isolation or as an alternative to GAAP
measures.
GENOMIC
HEALTH, INC.
Condensed
Consolidated Statements of Operations
(In thousands,
except per share amounts)
(Unaudited)
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
Product revenues –
United States
|
|
$
|
70,881
|
|
$
|
70,041
|
|
$
|
213,878
|
|
$
|
210,092
|
|
Product revenues –
Outside of the United States
|
|
12,940
|
|
12,095
|
|
39,409
|
|
34,824
|
|
Total product
revenues
|
|
|
83,821
|
|
|
82,136
|
|
|
253,287
|
|
|
244,916
|
|
Contract
revenues
|
|
-
|
|
122
|
|
-
|
|
210
|
|
Total
revenues
|
|
83,821
|
|
82,258
|
|
253,287
|
|
245,126
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
(1)(2):
|
|
|
|
|
|
|
|
|
|
Cost of product
revenues
|
|
13,433
|
|
13,425
|
|
40,904
|
|
45,177
|
|
Research and
development
|
|
17,212
|
|
14,746
|
|
47,868
|
|
45,303
|
|
Selling and
marketing
|
|
38,303
|
|
38,838
|
|
120,464
|
|
116,327
|
|
General and
administrative
|
|
17,505
|
|
18,268
|
|
52,651
|
|
55,243
|
|
Total operating
expenses
|
|
86,453
|
|
85,277
|
|
261,887
|
|
262,050
|
|
Loss from
operations
|
|
(2,632)
|
|
(3,019)
|
|
(8,600)
|
|
(16,924)
|
|
Interest
income
|
|
263
|
|
117
|
|
627
|
|
282
|
|
Gain on sales of
marketable securities
|
|
-
|
|
-
|
|
2,807
|
|
2,009
|
|
Other income
(expense), net
|
|
340
|
|
(111)
|
|
792
|
|
(174)
|
|
Loss before income
taxes
|
|
(2,029)
|
|
(3,013)
|
|
(4,374)
|
|
(14,807)
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
162
|
|
(193)
|
|
1,362
|
|
464
|
|
Net loss
|
|
$
|
(2,191)
|
|
$
|
(2,820)
|
|
$
|
(5,736)
|
|
$
|
(15,271)
|
|
Basic and diluted net
loss per share
|
|
$
|
(0.06)
|
|
$
|
(0.08)
|
|
$
|
(0.17)
|
|
$
|
(0.46)
|
|
Shares used in
computing basic and diluted net loss per share
|
|
34,675
|
|
33,391
|
|
34,373
|
|
33,141
|
|
|
(1)
|
Included in operating
expenses for the three months ended September 30, 2017, were
non-cash charges of $8.1 million, including $5.0 million of
stock-based compensation expense and $3.1 million of depreciation
and amortization expenses, compared with non-cash charges for the
same period in 2016 of $7.0 million, including $4.7 million of
stock-based compensation expense and $2.3 million of depreciation
and amortization expenses.
|
|
(2)
|
Included in operating
expenses for the nine months ended September 30, 2017, were
non-cash charges of $23.8 million, including $15.2 million of
stock-based compensation expense and $8.6 million of depreciation
and amortization expenses, compared with non-cash charges for the
same period in 2016 of $20.8 million, including $14.1 million of
stock-based compensation expense and $6.7 million of depreciation
and amortization expenses.
|
GENOMIC
HEALTH, INC.
Condensed
Consolidated Balance Sheets
(In
thousands)
|
|
|
|
As of
September 30,
2017
|
|
As of
December 31,
2016
|
|
|
|
(Unaudited)
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
43,019
|
|
$
|
40,404
|
|
Short-term marketable
securities (2)
|
|
75,942
|
|
56,585
|
|
Accounts receivable,
net
|
|
35,584
|
|
35,179
|
|
Prepaid expenses and
other current assets
|
|
11,506
|
|
13,796
|
|
Total current
assets
|
|
166,051
|
|
145,964
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
47,411
|
|
45,688
|
|
Other
assets
|
|
9,522
|
|
9,462
|
|
Total
assets
|
|
$
|
222,984
|
|
$
|
201,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
8,475
|
|
$
|
2,864
|
|
Accrued expenses and
other current liabilities
|
|
35,947
|
|
38,311
|
|
Other
liabilities
|
|
3,867
|
|
3,834
|
|
Stockholders'
equity
|
|
174,695
|
|
156,105
|
|
Total liabilities and
stockholders' equity
|
|
$
|
222,984
|
|
$
|
201,114
|
|
|
(1)
|
The condensed
consolidated balance sheet at December 31, 2016, has been derived
from the audited consolidated financial statements at that date
included in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2016.
|
|
(2)
|
Included in
short-term marketable securities as of December 31, 2016 is $9.3
million of corporate equity securities, representing the Company's
investment in Invitae Corporation. All remaining shares of Invitae
Corporation were sold during the quarter ended March 31,
2017.
|
GENOMIC HEALTH,
INC.
GAAP to Non-GAAP Reconciliations
(In thousands, except per share data)
(Unaudited)
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP (loss) from
operations
|
|
$
(2,632)
|
|
$
(3,019)
|
|
$
(8,600)
|
|
$
(16,924)
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development – collaboration with Biocartis, upfront license and
option fee
|
|
3,249
|
|
-
|
|
3,249
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Selling and
marketing – impairment charge for previously capitalized
software
|
|
-
|
|
2,600
|
|
-
|
|
2,600
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income
(loss) from operations
|
|
$
617
|
|
$
(419)
|
|
$
(5,351)
|
|
$
(14,324)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other
income (expense), net reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP interest and
other income (expense), net
|
|
$
603
|
|
$
6
|
|
$
4,226
|
|
$
2,117
|
|
|
|
|
|
|
|
|
|
|
|
Non-recurring
gain on sale of marketable securities
|
|
-
|
|
-
|
|
(2,807)
|
|
(2,009)
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP interest and
other income (expense), net
|
|
$
603
|
|
$
6
|
|
$
1,419
|
|
$
108
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
(benefit) expense reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP income tax
(benefit) expense
|
|
$
162
|
|
$
(193)
|
|
$
1,362
|
|
$
464
|
|
|
|
|
|
|
|
|
|
|
|
Reduced income
tax expense from the sale of marketable securities
|
|
-
|
|
-
|
|
(821)
|
|
(347)
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income tax
(benefit) expense
|
|
$
|
162
|
|
$
|
(193)
|
|
$
|
541
|
|
$
|
117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
(loss)
|
|
$
(2,191)
|
|
$
(2,820)
|
|
$
(5,736)
|
|
$
(15,271)
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development – collaboration with Biocartis, upfront license and
option fee
|
|
3,249
|
|
-
|
|
3,249
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Selling and
marketing – impairment charge for previously capitalized
software
|
|
-
|
|
2,600
|
|
-
|
|
2,600
|
|
|
|
|
|
|
|
|
|
|
|
Non-recurring
gain on sale of marketable securities
|
|
-
|
|
-
|
|
(2,807)
|
|
(2,009)
|
|
|
|
|
|
|
|
|
|
|
|
Reduced income
tax expense from the sale of marketable securities
|
|
-
|
|
-
|
|
821
|
|
347
|
|
Non-GAAP net income
(loss)
|
|
$
1,058
|
|
$
(220)
|
|
$
(4,473)
|
|
$
(14,333)
|
|
GENOMIC HEALTH,
INC.
GAAP to Non-GAAP Reconciliations (continued)
(In thousands, except per share data)
(Unaudited)
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustment summary:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development expense adjustments
|
|
$
3,249
|
|
$
-
|
|
$
3,249
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
Selling
and marketing expense adjustments
|
|
-
|
|
2,600
|
|
-
|
|
2,600
|
|
|
|
|
|
|
|
|
|
|
|
Gain on
sale of marketable securities
|
|
-
|
|
-
|
|
(2,807)
|
|
(2,009)
|
|
|
|
|
|
|
|
|
|
|
|
Total non-GAAP
adjustments before tax
|
|
3,249
|
|
2,600
|
|
442
|
|
591
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax effect
|
|
-
|
|
-
|
|
821
|
|
347
|
|
|
|
|
|
|
|
|
|
|
|
Total non-GAAP
adjustments after tax
|
|
$
3,249
|
|
$
2,600
|
|
$
1,263
|
|
$
938
|
|
The Company makes reference in this press release to "non-GAAP
net income" which excludes research and development expense
recorded for a one-time upfront license and option fee, for the
Company's collaboration with Biocartis N.V.; and certain other
non-recurring income and expenses. The Company believes that
excluding these items and their related tax effects from its
financial results reflects operating results that are more
indicative of the Company's ongoing operating performance while
improving comparability to prior periods, and, as such may provide
investors with an enhanced understanding of the Company's past
financial performance and prospects for the future. In addition,
the Company's management uses such non-GAAP measures internally to
evaluate and assess its core operations and to make ongoing
operating decisions. This information is not intended to be
considered in isolation or as a substitute for income (loss) from
operations, net loss or other income (expense) information prepared
in accordance with GAAP.
GHDX-F
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SOURCE Genomic Health, Inc.