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Genomic Health Announces Year-End 2012 Financial Results, Provides 2013 Financial Outlook

February 6, 2013

REDWOOD CITY, Calif., Feb. 6, 2013 /PRNewswire/ — Genomic Health, Inc. (Nasdaq: GHDX) today reported financial results and business progress for the quarter and year ended December 31, 2012.

Total revenue for the fourth quarter of 2012 increased to $60.4 million, compared with $53.4 million in the fourth quarter of 2011. Product revenue was $60.0 million in the fourth quarter of 2012, compared with $53.2 million for the fourth quarter of 2011, an increase of 13 percent.

Net income in the fourth quarter of 2012 was $2.0 million, compared with $2.6 million in the fourth quarter of 2011. Basic and diluted net income per share applicable to common stockholders was $0.06 and $0.06, respectively, for the fourth quarter of 2012, compared with $0.09 and $0.08 per share in the fourth quarter of 2011.

Total revenue for the year ended December 31, 2012 increased to $235.2 million, compared with $206.1 million in 2011, an increase of 14 percent. Product revenue was $233.5 million for the full-year 2012, compared with $204.8 million in 2011, an increase of 14 percent. Contract revenue comprised the balance of total revenue for each of these periods.

Net income was $8.2 million for the year ended December 31, 2012, compared with $7.8 million in 2011. Basic and diluted net income per share applicable to common stockholders was $0.27 and $0.26, respectively, in both 2012 and 2011.

“We delivered strong full-year 2012 financial results highlighted by 14 percent revenue growth and record revenue in the fourth quarter, reflecting continued market expansion in the U.S. and diversification of our business led by significant international growth,” said Kim Popovits, Chairman of the Board, Chief Executive Officer and President of Genomic Health. “With the planned launch of the Oncotype DX prostate cancer test, our third product franchise, we believe we are uniquely positioned to further diversify our business for long-term growth, and look forward to sharing full results of the prostate clinical validation study at AUA in early May.”

Additional Year-End and Fourth Quarter 2012 Financial Results

Total operating expenses for the year ended December 31, 2012 were $226.7 million, compared with total operating expenses for the comparable period in 2011 of $197.9 million.

Cash and cash equivalents and short-term investments at December 31, 2012 were $99.1 million after funding a $30 million share repurchase in the fourth quarter, compared with $100.5 million at December 31, 2011. Net cash provided by operating activities for the full year was $25.8 million.

Total operating expenses for the fourth quarter of 2012 were $58.4 million, compared with total operating expenses for the comparable period in 2011 of $50.7 million.

More than 74,520 Oncotype DX® test results were delivered for the year ended December 31, 2012, an increase of 12 percent, compared with more than 66,600 test results delivered in 2011. In the fourth quarter of 2012, more than 18,820 Oncotype DX test results were delivered, an increase of 10 percent, compared with more than 17,080 test results delivered in the same period in 2011.

2013 Financial Outlook

The company is providing the following financial guidance for the full-year ending December 31, 2013:

  • Total revenue of $258 to $266 million
  • GAAP basic net income (loss) per share between a net loss of ($0.12) and net income of $0.08
  • Oncotype DX tests delivered of 82,000 to 84,000

“In 2013, we plan to continue to invest in near-term opportunities to expand our global breast and colon cancer businesses in order to drive top-line revenue growth, and in our prostate cancer launch to build long-term value, and expect losses in the first and second quarters,” said Dean Schorno, Chief Financial Officer of Genomic Health.

Of note, non-GAAP basic net income per share, excluding stock compensation expense, is expected to be between $0.48 to $0.68.

Recent Business Highlights:

  • Presented data from six Oncotype DX studies from the United States and Europe at the San Antonio Breast Cancer Symposium (SABCS) in December across invasive breast cancer and DCIS (ductal carcinoma in situ), including a second comparison study highlighting clinically meaningful differences between the Oncotype DX Recurrence Score(® )and a commercially available prognostic 70-gene genomic classifier.
  • Announced that the full positive results from the large clinical validation study of the Oncotype DX prostate cancer test were accepted for oral presentation at the AUA Annual Meeting in early May. Following the presentation of these positive results, the company plans to make the test available to physicians and patients in the second quarter of 2013.
  • Announced that the results from the second large colon cancer clinical validation study, which provided confirmation of the landmark QUASAR results, were accepted for publication in the Journal of Clinical Oncology.
  • Presented data in three presentations at the 2013 Gastrointestinal Cancers Symposium in January that reinforce the clinical utility and cost effectiveness of the Oncotype DX test in stage II colon cancer patients.
  • The December 2012 issue of Value in Health published results from a modeling study showing that the use of the Oncotype DX test in stage II colon cancer patients may lead to health care cost savings while improving clinical outcomes.

Conference Call Details
To access the live conference call today, 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. 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 December 31, 2012, more than 10,000 physicians in over 65 countries had ordered approximately 335,000 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 2012 fourth quarter and full year results; the company’s intent to invest in its business and the areas in which it expects to make such investments, including international expansion, its product pipeline, driving reimbursement for and adoption of its colon cancer test, and in connection with its planned prostate cancer test launch; full year 2013 financial guidance, including expectations regarding total revenue, GAAP and non-GAAP basic net income per share, stock compensation expense and the number of test results delivered; the company’s expectations with respect to the timing of its planned launch of a test for prostate cancer and the attributes of any such test; the company’s belief that it is positioned for long-term growth; the company’s intent to invest in its business, the areas of investment and the expected results of those investments; the success or results of clinical trials and the timing of such activities; the applicability of clinical study results to actual outcomes; the ability of the company’s tests to impact clinical practice; and the focus and attributes of the company’s product pipeline. 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: completion of the audit of the company’s 2012 financial results; risks related to the commercial launch of a new test for prostate cancer; the company’s ability to increase usage of its tests; the risk that the company may not obtain or maintain sufficient levels of reimbursement, domestically or abroad, for its existing tests and any future tests it may develop; the company’s success retaining current contracts or levels of reimbursement coverage for its tests; the risks and uncertainties associated with regulation of the company’s tests by the FDA and other regulatory organizations; the company’s ability to compete against third parties; the company’s ability to develop and commercialize new tests; unanticipated costs or delays in research and development efforts; the success of the company’s next generation sequencing technology; the company’s ability to successfully commercialize its tests outside of the United States; the ability to obtain capital when needed; the company’s history of operating losses; the results of clinical studies; the applicability of clinical study results to actual outcomes; 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 September 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, 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 Income
                                (In thousands, except per share amounts)

                                                                         Twelve Months Ended
                            Three Months Ended
                                                                             December 31,
                               December 31,
                               ------------
                           2012               2011                   2012                   2011
                           ----               ----                   ----                   ----
                                 Unaudited                     Unaudited
    REVENUES:
    Product revenues              $59,998                         $53,155                         $233,457 $204,766
    Contract revenues       430                242                  1,716                  1,345
                            ---                ---                  -----                  -----
    Total revenues       60,428             53,397                235,173                206,111

    OPERATING EXPENSES
     (1):
    Cost of product
     revenues             9,641              7,352                 37,018                 33,832
    Research and
     development         13,329             10,282                 49,104                 39,864
    Selling and
     marketing           23,896             22,393                 93,553                 83,613
    General and
     administrative      11,546             10,638                 47,064                 40,543
                         ------             ------                 ------                 ------
    Total operating
     expenses            58,412             50,665                226,739                197,852
                         ------             ------                -------                -------
    Income from
     operations           2,015              2,732                  8,434                  8,259
    Interest income          70                  4                    295                    221
    Other income
     (expense), net          54                (14)                   (58)                  (205)
                            ---                ---                    ---                   ----
    Income before income
     taxes                2,139              2,722                  8,671                  8,275
                          -----              -----                  -----                  -----

    Income tax expense      187                163                    422                    429
                            ---                ---                    ---                    ---
    Net income                     $1,960                          $2,559                           $8,249   $7,846
                                   ======                          ======                           ======   ======
    Basic net income per
     share                          $0.06                           $0.09                            $0.27    $0.27
                                    =====                           =====                            =====    =====
    Diluted net income
     per share                      $0.06                           $0.08                            $0.26    $0.26
                                    =====                           =====                            =====    =====
    Shares used in
     computing basic net
     income per share    30,602             29,644                 30,326                 29,395
                         ======             ======                 ======                 ======
    Shares used in
     computing diluted
     net income per
     share               32,308             31,062                 32,151                 30,754
                         ======             ======                 ======                 ======

    (1)            Included in operating expenses for
                   the three months ended December
                   31, 2012 were non-cash charges
                   of $5.8 million, including $4.3
                   million of stock-based
                   compensation expense and $1.5
                   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 $1.7 million of
                   depreciation and amortization
                   expenses.

                   Included in operating expenses for
                   the twelve months ended December
                   31, 2012 were non-cash charges
                   of $20.6 million, including $15.1
                   million of stock-based
                   compensation expense and $5.5
                   million of depreciation and
                   amortization expenses, compared
                   with non-cash charges for the
                   same period in 2011 of $19.0
                   million, including $11.7 million
                   of stock-based compensation
                   expense and $7.3 million of
                   depreciation and amortization
                   expenses.

                           GENOMIC HEALTH, INC.
                   Condensed Consolidated Balance Sheets
                              (In thousands)

                                     As of                          As of
                                  December 31,                  December 31,
                                           2012                         2011
                                           ----                         ----
                                   (Unaudited)                            (1)

     Cash
     and
     cash
     equivalents                                        $18,005                $32,869
     Short-
     term
     marketable
     securities                          81,060                       67,605
     Accounts
     receivable,
     net                                 22,253                       21,077
     Prepaid
     expenses
     and
     other
     current
     assets                               8,891                        7,444
                                          -----                        -----
     Total
     current
     assets                             130,209                      128,995

     Property
     and
     equipment,
     net                                 14,104                        9,443
     Other
     assets                               9,421                        4,560
                                          -----                        -----
     Total
     assets                                            $153,734               $142,998
                                                       ========               ========

     Accounts
     payable                                             $4,881                 $7,025
     Accrued
     expenses
     and
     other
     current
     liabilities                         19,842                       17,265
     Deferred
     revenues                               374                        2,060
     Other
     liabilities                          2,311                        1,289
     Stockholders'
     equity                             126,326                      115,359
                                        -------                      -------
     Total
     liabilities
     and
     stockholders'
     equity                                            $153,734               $142,998
                                                       ========               ========

    (1)            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.


Source: PR Newswire