On August 1, 2017 Foundation Medicine, Inc. (NASDAQ:FMI) reported financial and operating results for its second quarter ended June 30, 2017 (Press release, Foundation Medicine, AUG 1, 2017, View Source [SID1234519963]). Results and business highlights for the quarter included: Schedule your 30 min Free 1stOncology Demo! Achieved second quarter revenue of $35.0 million, 24% year-over-year growth;
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Reported 15,924 clinical tests in the second quarter, 55% year-over-year growth;
Submitted the final module to the FDA in June for FoundationOne CDx as part of the Parallel Review process with FDA and CMS;
Presented new data at the 2017 annual meeting of the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) which continues to validate the clinical utility of Comprehensive Genomic Profiling (CGP) in guiding treatment towards targeted therapy, immunotherapy and clinical trials;
Announced a collaboration with ASCO (Free ASCO Whitepaper) to identify patients for its Targeted Agent and Profiling Utilization Registry (TAPUR) study;
Announced a collaboration with the National Cancer Institute (NCI) and ECOG-ACRIN Cancer Research Group to identify patients for NCI-Match (Molecular Analysis for Therapy Choice) study; and,
Published 29 manuscripts in high-quality, peer-reviewed journals and delivered 49 podium and poster talks at various medical and scientific meetings.
"Foundation Medicine delivered a strong second quarter, highlighted by record clinical volume and total revenue, increased adoption of our molecular information solutions by both clinicians and biopharma partners, and importantly, improved cancer care for the patients we serve," said Troy Cox, chief executive officer of Foundation Medicine. "In addition, we advanced the parallel review with FDA and CMS for FoundationOne CDx with the submission of our final module to the FDA in June, a significant milestone in the process. If approved, FoundationOne CDx would become the first pan-cancer universal companion diagnostic, a highly differentiated and valuable solution for patients, oncologists and biopharma partners."
Foundation Medicine reported total revenue of $35.0 million in the second quarter of 2017, compared to $28.2 million in the second quarter of 2016. Revenue from biopharmaceutical customers was $22.1 million in the second quarter of 2017, compared to $18.9 million in the second quarter of 2016. The results of 4,762 tests were reported to biopharmaceutical customers in this year’s second quarter.
Revenue from clinical testing in the second quarter of 2017 was $12.9 million, compared to $9.4 million in the second quarter of 2016. The company reported 15,924 tests to clinicians in the second quarter of 2017, a 55% increase from the same quarter last year. This number includes 12,442 FoundationOne tests, 1,608 FoundationOne Heme tests, 1,594 FoundationACT tests, and 280 FoundationFocus CDxBRCA tests.
Total operating expenses for the second quarter of 2017 were approximately $57.7 million, compared with $45.5 million for the second quarter of 2016. The increase in operating expenses was partially driven by investments in the company’s universal companion diagnostic assay, certain non-recurring cash and non-cash expenses, and investments in the company’s technology infrastructure. Net loss was approximately $44.3 million in the second quarter of 2017, or a $1.24 loss per share. At June 30, 2017, the company held approximately $71.5 million in cash, cash equivalents and marketable securities.
The company will now be reporting revenue in two components: Molecular Information Services and Pharma Research and Development Services. Molecular Information Services is revenue derived from commercially available platforms and services such as sample profiling, data access and SmartTrials, and includes revenue from both clinical and biopharma customers. Pharma Research and Development Services is revenue derived from work funded primarily by biopharma partners to develop new assays and other services. This new disclosure is intended to provide additional information related to the revenue and cost of revenue specifically related to the company’s commercially available platforms and services. During the second quarter, Molecular Information Services revenue was $30.3 million, including $12.9 million in revenue generated from our clinical customers, and $17.4 million in revenue generated from our biopharma customers. Pharma Research and Development Services revenue was $4.7 million.
On July 31st, Foundation Medicine entered into an agreement to expand its credit facility with Roche Finance from $100 million to $200 million. Any outstanding balance of the credit facility will convert to a term loan payable over a five-year period beginning on February 2, 2021. No funds were drawn under the credit facility at the time of the expansion. The company intends to use the proceeds to further fund product development, commercialization, corporate development initiatives and working capital.
2017 Outlook
Foundation Medicine’s business and financial outlook for 2017 is the following:
The company expects 2017 revenue will be in the range of $135 million to $145 million.
The company is increasing clinical volume guidance and now expects to deliver between 61,000 and 64,000 clinical tests in 2017.
The company is increasing operating expenses and now expects they will be in the range of $215 million and $225 million.
The company expects to advance its pan-cancer universal companion diagnostic assay, FoundationOne CDx, through the FDA and CMS Parallel Review process with a decision anticipated in the fourth quarter of 2017.
The company expects to continue reimbursement progress made in 2016 and pursue additional coverage decisions for its CGP assays.