Foundation Medicine (NASDAQ:FMI) today reported financial and operational results for the first quarter ended March 31, 2018. Highlights for the quarter included:
- Posted revenue of $52.8 million, 101% year-over-year growth;
- Reported 21,861 clinical tests, 57% year-over-year growth;
- Achieved broad Medicare coverage through a final National Coverage Determination (NCD) from the Centers for Medicare and Medicaid Services (CMS) for FoundationOne CDx™ across all solid tumors for eligible stage III and stage IV cancer patients;
- Launched FoundationOne CDx, the first FDA approved comprehensive genomic profiling assay for all solid tumors incorporating multiple companion diagnostics;
- Announced that an expanded version of FoundationACT®, which will include an expanded gene set and genomic biomarkers for microsatellite instability (MSI) and blood tumor mutational burden (bTMB), was granted Breakthrough Device designation (formerly Expedited Access Pathway) by the FDA;
- Announced a comprehensive gene expression profiling (GEP) program which leverages deep expertise in DNA and RNA sequencing to support precision oncology clinical research and development and identification of novel genomic and expression-based biomarkers for personalized cancer therapies;
- Partnered with Chugai Pharmaceutical Co. to commercialize the company’s CGP tests in Japan, including the filing by Chugai of an application with the Ministry of Health, Labour and Welfare (MHLW) for approval of FoundationOne CDx in Japan;
- Announced a partnership with Roche and DIAN Diagnostics, a leading NGS diagnostics laboratory in China, to integrate Foundation Medicine’s CGP assays into clinical patient care in mainland China; and
- Published 22 peer-reviewed manuscripts in medical and scientific journals and presented 35 podium talks and posters at scientific and medical meetings.
“Foundation Medicine delivered another strong quarter. Compared to the same quarter last year, we doubled revenue over last year and reported record clinical volume,” stated Troy Cox, chief executive officer of Foundation Medicine. “Just four months into the year, we’ve made meaningful progress on our strategic priorities for 2018, including the achievement of Medicare coverage for FoundationOne CDx across all solid tumors for qualifying patients, new partnerships to expand our commercial presence in China and Japan, and new biopharma collaborations. In addition, we continued our focus on innovation by accelerating our path to potential regulatory approval of an expanded version of our liquid biopsy assay, FoundationACT, and by initiating the development of a gene expression profiling platform that could enhance biomarker discovery and clinical decision making particularly in the field of immunotherapy. Our many accomplishments reinforce our leadership position and competitive differentiation and, most importantly, help enable access to personalized cancer care.”
Foundation Medicine reported total revenue of $52.8 million in the first quarter of 2018, compared to $26.3 million in the first quarter of 2017. Effective January 1, 2018, the company began recognizing revenue in accordance with FASB ASC Topic 606. The company adopted ASC Topic 606 utilizing the modified retrospective method. Additional details of the adoption of this new accounting standard and our revenue recognition policies will be included in the company’s first quarter 10-Q. A summary of revenue for the first quarter of 2018 compared to the first quarter of 2017 is as follows:
First Quarter | |||||||||||
($ in millions) | 2018 | 2017 | % Change | ||||||||
Molecular Information Services | |||||||||||
Clinical | $ | 18.8 | $ | 11.6 | 62 | % | |||||
Pharma | 27.8 | 9.5 | 193 | % | |||||||
Total Molecular Information Services | 46.6 | 21.1 | 121 | % | |||||||
Pharma R&D Services | 6.2 | 5.2 | 19 | % | |||||||
Total Revenue | $ | 52.8 | $ | 26.3 | 101 | % | |||||
Revenue from clinical testing in the first quarter of 2018 grew 62% year over year and was driven by increasing clinical volume. The company reported 21,861 clinical tests in the first quarter of 2018, a 57% increase from the same quarter last year. This number includes 17,685 FoundationOne® tests, 2,005 FoundationOne®Heme tests, 2,123 FoundationACT® tests, and 48 FoundationFocus™ CDx BRCA tests.
Molecular Information Services revenue from biopharmaceutical companies was very strong and was driven by clinical study sample testing. The company reported 7,184 tests to biopharmaceutical customers in the first quarter of 2018 compared to 1,802 tests in the first quarter of 2017.
Total operating expenses for the first quarter of 2018 were $62.0 million compared with $55.0 million for the first quarter of 2017. Net loss was $37.4 million in the first quarter of 2018, or $1.02 loss per share.
Cash and cash equivalents at March 31, 2018 was approximately $60.3 million, including $30 million borrowed during the first quarter under the company’s Credit Facility Agreement with Roche Finance.
2018 Outlook
- The company expects 2018 revenue will be in the range of $200 million to $220 million.
- The company expects to deliver between 90,000 and 100,000 clinical tests in 2018.
- The company expects operating expenses will be in the range of $250 million to $260 million in 2018.
Conference Call and Webcast Details
The company will conduct
a conference call today, Wednesday, May 2nd at 4:30 p.m. Eastern Time to
discuss its financial performance for the 2018 first quarter and other
business activities, including matters related to future performance. To
access the conference call via phone, dial 1-844-784-1732 from the
United States or dial 1-412-902-6714 internationally. Dial in
approximately ten minutes prior to the start of the call. The live,
listen-only webcast of the conference call may be accessed by visiting
the investors section of the company’s website at investors.foundationmedicine.com.
A replay of the webcast will be available shortly after the conclusion
of the call and will be archived on the company's website for two weeks
following the call.
About Foundation Medicine
Foundation Medicine (NASDAQ:FMI)
is a molecular information company dedicated to a transformation in
cancer care in which treatment is informed by a deep understanding of
the genomic changes that contribute to each patient’s unique cancer. The
company offers a full suite of comprehensive genomic profiling assays to
identify the molecular alterations in a patient’s cancer and match them
with relevant targeted therapies, immunotherapies and clinical trials.
Foundation Medicine's molecular information platform aims to improve
day-to-day care for patients by serving the needs of clinicians,
academic researchers and drug developers to help advance the science of
molecular medicine in cancer. For more information, please visit http://www.FoundationMedicine.com
or follow Foundation Medicine on Twitter (@FoundationATCG).
Foundation Medicine®, FoundationOne® and FoundationACT® are registered trademarks, and FoundationOne CDx™ and FoundationCORE™ are trademarks, of Foundation Medicine, Inc.
Cautionary Note Regarding Forward-Looking Statements
This
press release contains "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995, including, but
not limited to, statements regarding the value of the company’s
business; the benefits of the company’s products to physicians,
biopharmaceutical companies, payers, and patients in the treatment of
cancer and personalized cancer care; the company’s financial and
operational forecasts, including projections regarding the generation of
revenue, the number of tests to be conducted, and the incurrence of
operating expenses, including any changes to any earlier guidance; the
scope and timing of any approval of the company’s new liquid biopsy
assay as a medical device by the FDA; the benefits provided by
development of a gene expression profiling platform; and the use of any
funds from the company’s credit facility. All such forward-looking
statements are based on management's current expectations of future
events and are subject to a number of risks and uncertainties that could
cause actual results to differ materially and adversely from those set
forth in or implied by such forward-looking statements. These risks and
uncertainties include the risks that the company's facilities in North
Carolina and Germany do not facilitate the company's ability to achieve
it business objectives; the company's distribution partner outside the
United States is not able to achieve market penetration in new and
existing markets as quickly or as extensively as projected; the
company’s relationships with third-party or government payers do not
increase or expand; the company is unable to sustain or grow
relationships with biopharmaceutical partners; the company's revenue,
test or operating expense projections may turn out to be inaccurate
because of the preliminary nature of the forecasts; the company's
expectations and beliefs regarding the future conduct and growth of the
company's business are inaccurate; the company is unable to achieve
profitability, to compete successfully, to manage its growth, or to
develop its molecular information platform; and the risks described
under the caption “Risk Factors” in Foundation Medicine’s Annual Report
on Form 10-K for the year ended December 31, 2017, which is on file with
the Securities and Exchange Commission, as well as other risks detailed
in Foundation Medicine’s subsequent filings with the Securities and
Exchange Commission. All information in this press release is as
of the date of the release, and Foundation Medicine undertakes no duty
to update this information unless required by law.
FOUNDATION MEDICINE, INC. | |||||||||
Three Months Ended March 31, | |||||||||
2018 | 2017 | ||||||||
Revenue: | |||||||||
Molecular information services | $ | 31,943 | $ | 15,594 | |||||
Related-party molecular information services from Roche | 14,648 | 5,504 | |||||||
Pharma research and development services | 4,782 | 1,087 | |||||||
Related-party pharma research and development services from Roche | 1,467 | 4,143 | |||||||
Total revenue | 52,840 | 26,328 | |||||||
Costs and expenses: | |||||||||
Cost of molecular information services | 21,279 | 17,117 | |||||||
Cost of related-party molecular information services from Roche | 5,948 | 900 | |||||||
Selling and marketing | 17,480 | 16,436 | |||||||
General and administrative | 20,695 | 15,277 | |||||||
Research and development | 23,859 | 23,285 | |||||||
Total costs and expenses | 89,261 | 73,015 | |||||||
Loss from operations | (36,421 | ) | (46,687 | ) | |||||
Other (expense) income, net: | |||||||||
Interest (expense) income, net | (994 | ) | 90 | ||||||
Other income | — | 144 | |||||||
Net loss | $ | (37,415 | ) | $ | (46,453 | ) | |||
Net loss per common share applicable to common stockholders, basic and diluted | $ | (1.02 | ) | $ | (1.31 | ) | |||
Weighted-average common shares outstanding, basic and diluted | 36,792,980 | 35,426,296 | |||||||
FOUNDATION MEDICINE, INC. | |||||||
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Clinical: | |||||||
Molecular information services | $ | 15,589 | $ | 10,649 | |||
Related-party molecular information services from Roche | 3,198 | 970 | |||||
Total clinical revenue | $ | 18,787 | $ | 11,619 | |||
Pharma: | |||||||
Molecular information services | $ | 16,354 | $ | 4,945 | |||
Related-party molecular information services from Roche | 11,450 | 4,534 | |||||
Pharma research and development services | 4,782 | 1,087 | |||||
Related-party pharma research and development services from Roche | 1,467 | 4,143 | |||||
Total pharma revenue | $ | 34,053 | $ | 14,709 | |||
Total revenue | $ | 52,840 | $ | 26,328 | |||
FOUNDATION MEDICINE, INC. | |||||||
March 31, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 60,293 | $ | 71,404 | |||
Accounts receivable | 32,222 | 19,967 | |||||
Receivable due from Roche | 9,099 | 10,159 | |||||
Inventory | 16,411 | 13,171 | |||||
Prepaid expenses and other current assets | 13,003 | 9,118 | |||||
Total current assets | 131,028 | 123,819 | |||||
Property and equipment, net | 41,607 | 41,119 | |||||
Restricted cash | 2,305 | 2,305 | |||||
Other assets | 2,225 | 1,760 | |||||
Total assets | $ | 177,165 | $ | 169,003 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 25,865 | $ | 21,926 | |||
Accrued expenses and other current liabilities | 22,393 | 36,745 | |||||
Deferred revenue | 2,867 | 2,212 | |||||
Roche related-party deferred revenue | 4,801 | 3,742 | |||||
Current portion of deferred rent | 1,836 | 1,818 | |||||
Total current liabilities | 57,762 | 66,443 | |||||
Other non-current liabilities | 10,507 | 10,892 | |||||
Indebtedness to Roche – non-current | 90,000 | 60,000 | |||||
Total stockholders’ equity | 18,896 | 31,668 | |||||
Total liabilities and stockholders’ equity | $ | 177,165 | $ | 169,003 | |||
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Contacts:
Media Contact:
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617-245-3077
pr@foundationmedicine.com
or
Investor
Contact:
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ir@foundationmedicine.com