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Genomic Health Announces Third Quarter 2012 Financial Results and Business Progress

Product Revenue Increased 13% Compared with Prior Year

REDWOOD CITY, Calif., Nov. 7, 2012 /PRNewswire/ -- Genomic Health, Inc. (Nasdaq: GHDX) today reported financial results and business progress for the quarter ended September 30, 2012.

Total revenue increased to $58.6 million in the third quarter of 2012, compared with $52.1 million in the third quarter of 2011, an increase of 13 percent.  Product revenue was $58.4 million in the third quarter of 2012, compared with $51.7 million for the same period in 2011, an increase of 13 percent.

Net income was $3.7 million in the third quarter of 2012, compared with net income of $3.2 million in the third quarter of 2011. 

Basic and diluted net income per share applicable to common stockholders was $0.12 and $0.11, respectively in the third quarter of 2012, compared with basic and diluted net income per share of $0.11 and $0.10, respectively, for the same period in 2011.

"In the third quarter, we delivered strong net income and a 13 percent increase in year-over-year product revenue, led by significant international growth reflecting the diversification of our business and continued progress in capturing an important global opportunity," said Kim Popovits, Chairman of the Board, Chief Executive Officer and President of Genomic Health. "Further, with the announcement of positive prostate cancer validation study results, we are now positioned to leverage our proven commercial infrastructure in addressing a third major cancer, and one of the greatest needs in medicine, by making the Oncotype® DX prostate cancer test available in the first half of 2013."

Total operating expenses for the third quarter of 2012 were $54.9 million, including cost of product revenues of $9.0 million, compared with total operating expenses for the comparable period in 2011 of $48.7 million, including cost of product revenues of $9.2 million.  Included in operating expenses for the third quarter of 2012 were non-cash charges of $4.6 million, including $3.4 million of stock-based compensation expense and $1.2 million of depreciation and amortization expenses, compared with non-cash charges of $4.7 million, including $2.9 million of stock-based compensation expense and $1.8 million of depreciation and amortization expenses for the same period in 2011.

In the third quarter of 2012, more than 18,030 Oncotype DX test results were delivered, an increase of 7 percent, compared with 16,890 test results delivered in the third quarter of 2011.

Financial Results for Nine Months Ended September 30, 2012

Total revenue for the nine months ended September 30, 2012 was $174.7 million, compared with $152.7 million for the first nine months of 2011, an increase of 14 percent.  Product revenue for the nine months ended September 30, 2012 was $173.5 million, compared with $151.6  million for the first nine months of 2011, an increase of 14 percent.

Net income was $6.3 million for the nine months ended September 30, 2012, compared with net income of $5.3 million for the first nine months of 2011. 

Basic and diluted net income per share was $0.21 and $0.20, respectively, for the nine months ended September 30, 2012, compared with basic and diluted net income per share of $0.18 and $0.17, respectively, for the same period in 2011.

Cash and cash equivalents and investments in marketable securities at September 30, 2012 were $127.0 million, compared with $100.5 million at December 31, 2011.

Recent Business Highlights:

Oncotype DX Breast and Colon Cancer Commercial Progress

  • Established reimbursement with three additional state Medicaid programs for node-negative breast cancer patients.
  • Secured incremental international reimbursement for the Oncotype DX breast cancer test in France, Greece, Kuwait and Spain.
  • The Journal of Medical Economics and Bulletin du Cancer published studies demonstrating that the Oncotype DX breast cancer test is expected to be cost saving in Germany and France, respectively.

Medical Meeting Presentations and Pipeline

  • Announced positive topline results from a large clinical validation study of the Oncotype DX Genomic Prostate Score (GPS).  Complete data from this study has been submitted for presentation at the 2013 ASCO Genitourinary Cancers Symposium in February.  Based on the positive results, the company plans to make the test available to physicians and patients in the first half of 2013.
  • Presented data from three studies at the 2012 European Society of Medical Oncology (ESMO) Congress that support expanded use of Oncotype DX tests in optimizing treatment decisions for breast and colon cancer patients at various stages of disease.
  • Presented new data from two studies at the 2012 ASCO Breast Cancer Symposium that reinforce the value of Oncotype DX in node-positive breast cancer patients and provide further background on the development of the Oncotype DX DCIS (ductal carcinoma in situ of the breast) Score.
  • Received acceptance for six Oncotype DX studies at the upcoming San Antonio Breast Cancer Symposium (SABCS) in December.

 

Conference Call Details

To access the live conference call today, November 7, 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.  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 website at http://investor.genomichealth.com/events.cfm. 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 global healthcare company that provides actionable genomic information to personalize cancer treatment decisions.  The company's lead product, the Oncotype DX® breast cancer test, has been shown to predict the likelihood of chemotherapy benefit as well as recurrence in invasive breast cancer and has been shown to predict the likelihood of recurrence in ductal carcinoma in situ (DCIS).  In addition to this widely adopted test, Genomic Health provides the Oncotype DX colon cancer test, the first multi-gene expression test developed for the assessment of risk of recurrence in patients with stage II and stage III disease.  As of September 30, 2012, more than 10,000 physicians in over 65 countries had ordered more than 320,000 Oncotype DX tests.  Genomic Health has a robust pipeline focused on developing tests to optimize the treatment of prostate and renal cell cancers, as well as additional treatment decisions in breast and colon cancers.  The company is based in Redwood City, California with European headquarters in Geneva, Switzerland.  For more information, please visit, www.GenomicHealth.com. To learn more about Oncotype DX tests, visit: www.OncotypeDX.com and www.mybreastcancertreatment.org

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including our belief that the growth in our international business reflects our continued progress in capturing an important global opportunity; our belief that we are positioned to leverage our proven commercial infrastructure in addressing a new cancer; our expectations regarding the timing of an expected launch of a test for prostate cancer; our expectations regarding the possible benefits of  any new prostate cancer test; the focus and attributes of the company's product pipeline; the ability of the company to develop additional tests in the future; and the ability of any potential tests the company may develop to optimize cancer treatment. 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: risks related to the commercial launch of a new test for prostate cancer; the results of clinical and developmental studies; the applicability of clinical study results to actual outcomes; our ability to develop and commercialize new tests and the timing thereof; unanticipated costs or delays in research and development efforts; the applicability of initial next generation sequencing studies to future results; the risk that we may not obtain or maintain sufficient levels of reimbursement for our existing tests and any future tests we may develop, both domestically and abroad; our ability to compete against third parties; the risks and uncertainties associated with the regulation of our tests by the FDA and other agencies abroad; 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, 2012. 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 Income

(In thousands, except per share amounts)




Three Months Ended


Nine Months Ended




September 30,


September 30,




2012


2011


2012


2011


REVENUES:










Product revenues


$

58,371


$

51,661


$

173,459


$

151,611


Contract revenues


277


397


1,287


1,102


Total revenues


58,648


52,058


174,746


152,713












OPERATING EXPENSES (1):










Cost of product revenues


9,037


9,195


27,377


26,480


Research and development


12,267


9,611


35,775


29,582


Selling and marketing


21,526


20,157


69,657


61,220


General and administrative


12,107


9,696


35,518


29,904


Total operating expenses


54,937


48,659


168,327


147,186


Income from operations


3,711


3,399


6,419


5,527


Interest income


77


77


226


217


Other income (expense), net


33


(113)


(112)


(191)


Income before income taxes


3,821


3,363


6,533


5,553












Income tax expense


109


138


243


266


Net income


$

3,712


$

3,225


$

6,290


$

5,287


Basic net income per share


$

0.12


$

0.11


$

0.21


$

0.18


Diluted net income per share


$

0.11


$

0.10


$

0.20


$

0.17


Shares used in computing basic net income per share


30,580


29,491


30,233


29,311


Shares used in computing diluted net income per share


32,578


30,808


32,095


30,661


 

(1)     Included in operating expenses for the three months ended September 30, 2012 were non-cash charges of $4.6 million, including $3.4 million of stock-based compensation expense and $1.2 million of depreciation and amortization expenses, compared with non-cash charges for the same period in 2011 of $4.7 million, including $2.9 million of stock-based compensation expense and $1.8 million of depreciation and amortization expenses.

Included in operating expenses for the nine months ended September 30, 2012 were non-cash charges of $14.8 million, including $10.8 million of stock-based compensation expense and $4.0 million of depreciation and amortization expenses, compared with non-cash charges for the same period in 2011 of $14.3 million, including $8.8 million of stock-based compensation expense and $5.5 million of depreciation and amortization expenses.

 

GENOMIC HEALTH, INC.

Condensed Consolidated Balance Sheets

(In thousands)




As of

June 30,
2012


As of December 31,
2011




(Unaudited)












Cash and cash equivalents


$

57,959


$

32,869


Short-term marketable securities


68,251


67,605


Accounts receivable, net


19,926


21,077


Prepaid expenses and other current assets


8,630


7,444


Total current assets


154,766


128,995








Long-term marketable securities


771



Property and equipment, net


11,799


9,443


Other assets


5,837


4,560


Total assets


$

173,173


$

142,998




















Accounts payable


$

3,392


$

7,025


Accrued expenses and other current liabilities


19,933


17,265


Deferred revenues


800


2,060


Other liabilities


2,211


1,289


Stockholders' equity


146,837


115,359


Total liabilities and stockholders' equity


$

173,173


$

142,998


The condensed consolidated balance sheet at December 31, 2011 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, 2011.

 

SOURCE Genomic Health, Inc.

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