On August 2, 2016 Foundation Medicine, Inc. (NASDAQ:FMI) reported financial and operating results for its second quarter ended June 30, 2016 (Press release, Foundation Medicine, AUG 2, 2016, View Source [SID:1234514184]). Highlights for the quarter included:
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Achieved second quarter revenue of $28.2 million, 26% year-over-year growth;
Reported 10,286 clinical tests in the second quarter, 16% year-over-year growth;
Grew FoundationCORE, the company’s molecular information knowledgebase, to nearly 90,000 patient cases;
Commercially launched FoundationACT, the company’s circulating tumor DNA (ctDNA) assay;
Presented new data at the 2016 annual meeting of the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) demonstrating that tumor mutational burden as measured by FoundationOne may predict response to cancer immunotherapies in a broad range of solid tumors;
Published 23 manuscripts in high-quality, peer-reviewed journals and delivered 30 podium and poster talks at various medical and scientific meetings.
Foundation Medicine reported total revenue of $28.2 million in the second quarter of 2016, compared to $22.5 million in the second quarter of 2015. Revenue from biopharmaceutical partners grew 88% to $18.8 million in the second quarter of 2016, compared to $10.0 million in the second quarter of 2015. The increase in revenue demonstrates the company’s leading role as an important partner in drug development for oncology-focused biopharmaceutical companies.
Revenue from clinical testing in the second quarter of 2016 was $9.4 million, compared to $12.4 million in the second quarter of 2015. The decrease in clinical revenue was driven in part by moving in-network with a large national payor for stage IV Non-Small Cell Lung Cancer (NSCLC) testing, which resulted in no longer receiving payments for other indications and also resulted in payment delays for the covered indication.
The company reported 10,286 clinical tests in the second quarter of 2016, a 16% increase from the same quarter last year. This reported volume number includes 8,864 FoundationOne tests and 1,248 FoundationOne Heme tests.
"Foundation Medicine reported a strong second quarter highlighted by continued growth in our biopharma business and robust clinical volume growth," said Michael Pellini, M.D., chief executive officer of Foundation Medicine. "We believe that our recent accomplishments, which also include our participating in both the Expedited Access Pathway with FDA and Parallel Review with FDA and CMS for FoundationOne, position our company for continued growth and further competitive differentiation, and place us at the leading edge of transforming cancer care."
The company’s molecular information knowledgebase, FoundationCORE, grew to nearly 90,000 patient cases. FoundationCORE is a unique asset and critical component of the value that Foundation Medicine delivers to its biopharmaceutical and physician customers. The increasing scale and breadth of this high quality, clinically relevant oncology data set derived from the company’s testing platform continues to enhance clinical practice and help enable improved outcomes for patients.
Total operating expenses for the second quarter of 2016 were approximately $45.5 million compared with $46.6 million for the second quarter of 2015, which included a one-time expense in April 2015 of $14.4 million in advisor fees related to the closing of the company’s strategic collaboration with Roche. Net loss was approximately $29.0 million in the second quarter of 2016, or a $0.84 loss per share. At June 30, 2016, the company held approximately $190.4 million in cash, cash equivalents and marketable securities.
Today, Foundation Medicine also secured a $100 million credit facility from Roche Finance. The facility represents a three-year line of credit, after which any outstanding balance will convert to a term loan payable over the following five years. No funds were drawn under the credit facility upon the closing. The company intends to use the proceeds for product development and commercialization, corporate development and working capital management.
Recent Enterprise Highlights
Announced acceptance of FoundationOne for review as part of the Expedited Access Pathway program with FDA and Parallel Review through FDA and CMS. If approved, FoundationOne could be the first FDA-approved comprehensive genomic profiling (CGP) assay to incorporate multiple companion diagnostics to support precision medicine in oncology and would be offered as a covered benefit to Medicare beneficiaries nationwide. View Source
Announced the first strategic initiative under a master collaboration agreement with AstraZeneca to develop a novel companion diagnostic assay for Lynparza to support its global development program.
Announced the release of a broad set of genomic profiles of adult cancers from FoundationCORE to the National Cancer Institute in support of the National Cancer Moonshot and Precision Medicine initiatives.
2016 Outlook
Foundation Medicine’s business and financial outlook for 2016 is the following:
The company expects 2016 revenue will be in the range of $110 to $120 million.
The company is increasing clinical volume guidance and now expects to deliver between 39,000 and 41,000 FoundationOne and FoundationOne Heme clinical tests in 2016.
The company expects operating expenses will be in the range of $175 and $185 million.
The company intends to expand upon reimbursement progress and work to drive additional coverage decisions.