Genomic Health, Inc. : Genomic Health Announces Year-End 2011 Financial Results, Provides 2012 Financial Outlook
02/06/2012| 04:05pm US/Eastern
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REDWOOD CITY, Calif., Feb. 6, 2012 /PRNewswire/ -- Genomic Health, Inc. (Nasdaq: GHDX) today reported financial results and business progress for the year ended December 31, 2011.
Total revenue for the year ended December 31, 2011 increased to $206.1 million, compared with $178.1 million in 2010, an increase of 16 percent. Product revenue was $204.8 million, compared with $174.9 million in 2010, an increase of 17 percent. Contract revenue comprised the balance of total revenue for each of these periods.
Net income was $7.8 million for the year ended December 31, 2011, compared with $4.3 million in 2010. Basic and diluted net income per share applicable to common stockholders was $0.27 and $0.26, respectively in 2011, compared with $0.15 and $0.14 per share, respectively, in 2010.
Total revenue for the fourth quarter of 2011 increased to $53.4 million, compared with $47.1 million in the fourth quarter of 2010. Product revenue was $53.2 million in the fourth quarter of 2011, compared with $46.3 million for the fourth quarter of 2010, an increase of 15 percent. Net income in the fourth quarter of 2011 was $2.6 million, compared with $1.7 million in the fourth quarter of 2010. Basic and diluted net income per share applicable to common stockholders was $0.09 and $0.08, respectively, for the fourth quarter of 2011, compared with $0.06 per share in the fourth quarter of 2010.
"In 2011, we increased our financial strength and generated $7.8 million in profit while making important progress across our commercial and pipeline programs," said Kim Popovits, President and Chief Executive Officer of Genomic Health. "As we look ahead, we remain focused on providing solutions that deliver better outcomes for cancer patients worldwide by continuing to expand our Oncotype DX(®) services to include prostate cancer and by accelerating the development of next generation genomic and genetic services."
In a separate press release issued today the company announced plans to establish a wholly owned genetics subsidiary with the intention of making clinically relevant genetic information available to physicians and patients beginning in 2013. Genomic Health plans to invest up to $20 million in the new subsidiary over the next two years and has incorporated this into its 2012 financial outlook provided below.
Additional Year-End and Fourth Quarter 2011 Financial Results
Total operating expenses for the year ended December 31, 2011 were $197.9 million, including cost of product revenues of $33.8 million, compared with total operating expenses for the comparable period in 2010 of $174.2 million, including cost of product revenues of $34.6 million. Included in operating expenses for the year ended December 31, 2011 were non-cash charges of $19.0 million, including $11.7 million of stock-based compensation expense and $7.3 million of depreciation and amortization expenses, compared with non-cash charges for the same period in 2010 of $17.5 million, including $10.3 million of stock-based compensation expense and $7.2 million of depreciation and amortization expenses.
Cash and cash equivalents and short-term investments at December 31, 2011 were $100.5 million, compared with $76.8 million at December 31, 2010, an increase of $23.7 million.
Total operating expenses for the fourth quarter of 2011 were $50.7 million, including cost of product revenues of $7.4 million, compared with total operating expenses for the comparable period in 2010 of $45.8 million, including cost of product revenues of $8.7 million. Included in operating expenses for the fourth quarter of 2011 were 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, compared with non-cash charges for the same period in 2010 of $4.2 million, including $2.3 million of stock-based compensation expense and $1.9 million of depreciation and amortization expenses.
More than 66,600 Oncotype DX test results were delivered for the year ended December 31, 2011, an increase of 16 percent, compared with more than 57,270 test results delivered in 2010. In the fourth quarter of 2011, more than 17,080 Oncotype DX test results were delivered, an increase of 13 percent, compared with more than 15,180 test results delivered in the same period in 2010.
2012 Financial Outlook
The company is providing the following financial guidance for the full year ending December 31, 2012:
-- Total revenue of $230 to $240 million
-- Oncotype DX test results delivered of 75,000 to 77,000
-- Full-year net income of $5 to $8 million before an incremental loss of
up to $8 million in new subsidiary
"In 2012, we plan to further strengthen our cancer genomics business by making key investments aimed at driving top-line revenue growth with positive cash from operations," said Dean Schorno, Chief Financial Officer of Genomic Health. "Over the next several years, we plan to aggressively invest in what we believe are significant opportunities presented by our growing worldwide business, the recent launch of our breast cancer DCIS Score, our prostate cancer program and next generation products."
Recent Business Highlights:
Oncotype DX Breast Cancer Commercial Progress
-- Began providing the Oncotype DX DCIS Score to physicians and patients
worldwide.
-- Established node-positive reimbursement for an additional eight million
U.S. lives through policies or arrangements with BCBS Michigan, Tufts
Associated Health Maintenance Organization, Presbyterian Health Plan,
BCBS South Carolina HMO and Priority Health.
-- Established Medicaid reimbursement for node-negative breast cancer in
Minnesota, Michigan, Vermont and Oregon.
-- The British Columbia Breast Tumour Group recommended the Ministry of
Health begin paying for Oncotype DX for node-negative breast cancer
patients in British Columbia, Canada.
-- Secured reimbursement coverage with a leading German Sick fund for
patients participating in a study conducted by the West German Study
Group.
-- NCIC researchers in Canada began enrolling node-positive patients in the
NCI-sponsored RxPONDER trial, which requires the Oncotype DX Recurrence
Score® for study entry.
-- Established distribution agreements to provide Oncotype DX in Hungary,
Romania and Peru.
Oncotype DX Colon Cancer Commercial Progress
-- The Journal of Clinical Oncology published results from the landmark
QUASAR clinical validation study, which demonstrated that the Oncotype
DX colon cancer test predicts recurrence risk in stage II colon cancer
patients following surgery.
-- Began providing mismatch repair (MMR) testing for recurrence risk that
allows physicians to identify the approximately 15 percent of stage II
colon cancer patients with MMR-deficient tumors, who have low recurrence
risk and thus may be more appropriately considered for observation
following surgery.
-- Presented results of the first clinical decision making study of the
Oncotype DX colon cancer test at the Gastrointestinal (GI) Cancers
Symposium, demonstrating a 29 percent change in treatment
recommendations.
-- Established reimbursement for an additional 3.8 million U.S. lives
through policies or arrangements with Wellmark BCBS of Iowa, Wellmark
BCBS of South Dakota, Wisconsin Physicians Service Insurance
Corporation, Preferred One and AvMed.
Product Pipeline, Peer-Reviewed Publications and Medical Meeting Presentations
-- Initiated large clinical validation study of prostate cancer test.
-- Accelerated next generation sequencing (NGS) program in development to
be used in clinical studies later this year.
-- Presented 16 Oncotype DX studies at the San Antonio Breast Cancer
Symposium (SABCS) in December, including:
-- Complete results from the study of Oncotype DX in patients with
DCIS.
-- Multiple international studies on changing treatment decisions
and/or cost effectiveness of Oncotype DX in the United Kingdom,
Germany, France, Ireland, Israel, Canada, Hungary, Japan, Singapore,
Australia, and Venezuela.
-- Positive results from the first clinical outcomes study for
biomarker discovery using NGS for whole transcriptome profiling of
fixed tumor specimens.
-- Presented results from a large clinical study in prostate cancer at the
Genitourinary (GU) Cancer Symposium evaluating the relationship of
microRNAs, a novel class of biomarkers, to clinical outcomes for
patients with early stage prostate cancer.
Conference Call Details
To access the live conference call on February 6 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. A telephone replay will be available beginning approximately two hours after the call through February 13, and may be accessed by dialing (855) 859-2056 from the United States and Canada or +1(404) 537-3406 internationally. The replay passcode is 45978166.
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 call to allow for any software download that may be necessary.
About Genomic Health
Genomic Health, Inc. (NASDAQ: GHDX) is a global cancer company focused on the development and commercialization of genomic-based clinical laboratory services that analyze the underlying biology of cancer allowing physicians and patients to make individualized treatment decisions. Its 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 the 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 multigene expression test developed for the assessment of risk of recurrence in patients with stage II disease. As of December 31, 2011, more than 10,000 physicians in over 65 countries had ordered more than 265,000 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 statements relating to the company's 2011 fourth quarter and annual results; 2012 financial guidance, including the company's expectations regarding the number of test results delivered, total revenue and net income before investments; our plans to focus on continuing to expand our Oncotype DX services and to accelerate our next generation product development, and the focus of new product development; our expectations regarding the business of a subsidiary to be formed; our belief regarding our ability to leverage our global infrastructure in cancer to integrate the human genome more broadly into medical practice; our plans to make investments aimed at driving top-line revenue growth with positive cash from operations; our plans to invest in our business and the amounts and areas of investments; 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: 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; the results of our year end audit; 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 period ended September 30, 2011. 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, and DCIS 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 Operations
(in thousands, except per share amounts)
For the Three For the Twelve
Months Ended Months Ended
December 31, December 31,
2011 2010 2011 2010
---- ---- ---- ----
(Unaudited) (Unaudited)
REVENUES:
Product revenues $53,155 $46,317 $204,766 $174,870
Contract revenues 242 799 1,345 3,231
--- --- ----- -----
Total revenues 53,397 47,116 206,111 178,101
------ ------ ------- -------
OPERATING EXPENSES:
Cost of product
revenues 7,352 8,707 33,832 34,634
Research and
development 10,282 9,272 39,864 33,225
Selling and
marketing 22,393 18,536 83,613 71,405
General and
administrative 10,638 9,278 40,543 34,913
------ ----- ------ ------
Total operating
expenses 50,665 45,793 197,852 174,177
------ ------ ------- -------
Income from
operations 2,732 1,323 8,259 3,924
----- ----- ----- -----
Interest income 4 58 221 232
Other income
(expense), net (14) (18) (205) (4)
--- --- ---- ---
Income before income
taxes 2,722 1,363 8,275 4,152
----- ----- ----- -----
Income tax expense
(benefit) 163 (322) 429 (136)
--- ---- --- ----
Net income $2,559 $1,685 $7,846 $4,288
====== ====== ====== ======
Basic net income per
share $0.09 $0.06 $0.27 $0.15
Diluted net income
per share $0.08 $0.06 $0.26 $0.14
Shares used to
compute basic net
income per share 29,644 28,910 29,395 28,815
Shares used to
compute diluted net
income per share 31,062 29,763 30,754 29,653
------ ------ ------ ------
Genomic Health, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
As of As of
December 31, December 31,
2011 2010
(Unaudited) (Unaudited)
Cash and cash equivalents $32,869 $31,183
Short-term investments 67,605 45,635
Accounts receivable, net 21,077 14,306
Prepaid expenses and other
current assets 7,444 6,541
----- -----
Total current assets 128,995 97,665
Property and equipment, net 9,443 10,345
Restricted cash 107 608
Other assets 4,453 2,243
Total assets $142,998 $110,861
======== ========
Accounts payable $7,025 $3,968
Accrued expenses and other
current liabilities 17,265 16,305
Deferred revenues 2,060 2,821
Other liabilities 1,289 1,657
Stockholders' equity 115,359 86,110
Total liabilities and
stockholders' equity $142,998 $110,861
======== ========
The condensed consolidated balance sheet at December 31,
2010 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, 2010.
SOURCE Genomic Health, Inc.
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