Foundation Medicine, Inc.
August 12, 2014
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Foundation Medicine Announces 2014 Second Quarter Results and Recent Highlights

Continued Strength in Clinical Test Volume and Revenue Growth

CAMBRIDGE, Mass.--(BUSINESS WIRE)-- Foundation Medicine, Inc. (NASDAQ:FMI) today reported financial and operating results for the quarter ended June 30, 2014.

Foundation Medicine reported total revenue of $14.5 million in the second quarter of 2014, a 145% increase compared to $5.9 million in the second quarter of 2013 and a 27% increase compared to $11.5 million in the first quarter of 2014. Revenue from clinical testing in this year's second quarter was $9.4 million, a 233% increase compared to $2.8 million in the second quarter of 2013 and a 32% increase compared to $7.1 million in the first quarter of 2014.

The company reported 5,908 clinical tests in the second quarter of 2014, a 263% increase from the same quarter last year and a 26% increase from the 4,702 tests reported in this year's first quarter. This number includes 4,960 FoundationOne® tests and 948 FoundationOne Heme tests.

The company's clinical assays, FoundationOne for solid tumors and FoundationOne Heme for hematologic malignancies, sarcomas and pediatric cancers, provide a fully informative genomic profile that identifies clinically actionable molecular alterations to help physicians match relevant targeted therapies and clinical trials with the underlying genomic drivers of a patient's cancer.

"We continued to gain commercial momentum in the second quarter, with strong growth in clinical test volumes and in the revenue contribution from our pharmaceutical industry partnerships," said Michael Pellini, M.D., president and chief executive officer of Foundation Medicine. "It was especially encouraging to see a large number of new abstracts and publications coming from our partnerships and from independent research efforts. These data further validate our comprehensive approach to clinical testing and also represent a growing base of evidence supporting the clinical utility of our tests, a key factor in the reimbursement equation for payors."

Total operating expenses for the second quarter of 2014 were $21.6 million, compared with $18.3 million for the first quarter of 2014. The second quarter increase in operating expenses was primarily driven by continued investment in commercial infrastructure and research and development.

Net loss was $13.8 million in the second quarter of 2014, or a $0.49 loss per share. At June 30, 2014, the company had $97.1 million in cash and cash equivalents.

"We remain focused on facilitating the practical utilization of our test findings in clinical care," said Vincent Miller, M.D., chief medical officer of Foundation Medicine. "Our critical role in the Lung-MAP trial and launch of FoundationOne Careline emphasize our commitment to patients and physicians and our efforts to improve access to FDA-approved therapies and other therapies under study in clinical trials."

Recent Enterprise Highlights

2014 Outlook

The company confirmed its prior guidance for 2014, including:

Conference Call and Webcast Details

The company will conduct a conference call today, Tuesday, August 12th at 4:30 p.m. Eastern Time to discuss our financial performance for the second quarter and other business activities, including matters related to future performance. To access the conference call via phone, dial 1-855-420-0652 from the United States and Canada, or dial 1-484-365-2939 internationally, and for either number reference Foundation Medicine and provide the passcode 68469471. Dial in approximately ten minutes prior to the start of the call. The live, listen-only webcast of the conference call may be accessed by visiting the investors section of the company's website at investors.foundationmedicine.com. A replay of the webcast will be available shortly after the conclusion of the call and will be archived on the company's website for two weeks following the call.

About Foundation Medicine

Foundation Medicine (NASDAQ: FMI) is a molecular information company dedicated to a transformation in cancer care in which treatment is informed by a deep understanding of the genomic changes that contribute to each patient's unique cancer. The company's clinical assays, FoundationOne for solid tumors and FoundationOne Heme for hematologic malignancies, sarcomas and pediatric cancers, provide a fully informative genomic profile to identify the molecular alterations in a patient's cancer to help physicians in matching them with relevant targeted therapies and clinical trials. Foundation Medicine's molecular information platform aims to improve day-to-day care for patients by serving the needs of clinicians, academic researchers and drug developers to help advance the science of molecular medicine in cancer. For more information, please visit www.FoundationMedicine.com or follow Foundation Medicine on Twitter (@FoundationATCG).

Foundation Medicine® and FoundationOne® are registered trademarks and Interactive Cancer Explorer™ is a trademark of Foundation Medicine, Inc.

Cautionary Note Regarding Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding the clinical utility and actionability of FoundationOne and FoundationOne Heme, the number of clinical tests expected to be reported in 2014 and the expected revenue in 2014, and the introduction of new versions and features to the Interactive Cancer Explorer. All such forward-looking statements are based on management's current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in or implied by such forward-looking statements. These risks and uncertainties include the risks that physicians may not be able to obtain access to relevant targeted therapies and clinical trials matched to molecular alterations identified FoundationOne and FoundationOne Heme as readily as expected; Foundation Medicine's test or revenue projections may turn out to be inaccurate because of the preliminary nature of the forecasts; that the introduction of new features to the Interactive Cancer Explorer are delayed, discontinued or substantially changed; Foundation Medicine's expectations and beliefs regarding the future conduct and growth of Foundation Medicine's business and the markets in which we operate; delays or denials in obtaining coverage and reimbursement decisions for FoundationOne, FoundationOne Heme and any subsequent products we may develop; the inability of Foundation Medicine to achieve profitability, to compete successfully, to manage its growth, or to develop its molecular information platform; and the risks described under the caption "Risk Factors" in Foundation Medicine's Annual Report on Form 10-K for the year ended December 31, 2013, which is on file with the Securities and Exchange Commission, as well as other risks detailed in subsequent filings with the Securities and Exchange Commission. All information in this press release is as of the date of the release, and Foundation Medicine undertakes no duty to update this information unless required by law.

- Financial Tables to Follow -

FOUNDATION MEDICINE, INC.

Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share data)

(unaudited)

       
Three Months Ended   Six Months Ended
June 30, June 30,
2014   2013 2014   2013
Revenue $ 14,496

$     5,920

$    25,951

$ 11,120
Costs and expenses:
Cost of revenue 6,619

2,219

11,910 4,597
Selling and marketing 7,170 2,875 12,860 4,686
General and administrative 5,825 4,755 11,525 7,905
Research and development   8,645   6,097   15,560     11,079  
 
Total costs and expenses   28,259   15,946   51,855     28,267  

 

Loss from operations (13,763 ) (10,026 ) (25,904 ) (17,147 )
Other income (expense):

 

Interest expense, net (16 ) (65 ) (41 ) (141 )
Other expense, net     (96 )     (102 )
 
Total other expense, net   (16 ) (161 ) (41 )   (243 )
 
Net loss $ (13,779 )

$  (10,187

)

$   (25,945

)

$ (17,390 )
 
Accretion of redeemable convertible preferred stock     (42 )     (92 )
 
Net loss applicable to common stockholders $ (13,779 )

$  (10,229

)

$   (25,945

) $ (17,482 )
 
Net loss per common share applicable to common stockholders, basic and diluted $

(0.49

)

$     (3.34

)

    $      (0.93

) $ (5.92 )
 
Weighted-average common shares outstanding, basic and diluted   27,876,931   3,065,877   27,804,914     2,950,996  
 
Comprehensive loss $ (13,779 )

$ (10,187

)

$  (25,945

) $ (17,390 )

FOUNDATION MEDICINE, INC.

Consolidated Condensed Balance Sheets

(In thousands)

(unaudited)

   
June 30, December 31,
2014 2013
Assets
Current assets:
Cash and cash equivalents $ 97,054 $ 124,293
Accounts receivable 6,067 6,262
Inventory 2,593 1,763
Prepaid expenses and other current assets   1,191   992
Total current assets 106,905 133,310
Property and equipment, net 21,696 22,104
Restricted cash 1,725 1,725
Other assets   321   129
Total assets $ 130,647 $ 157,268
 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 5,491 $ 7,007
Accrued expenses and other current liabilities 4,747 5,168
Deferred revenue 693 918
Current portion of deferred rent 1,178 1,167
Current portion of notes payable   576   1,499
Total current liabilities 12,685 15,759
Other non-current liabilities 10,040 9,798
Total stockholders' equity   107,922   131,711
Total liabilities and stockholders' equity $ 130,647 $ 157,268

Media - Foundation Medicine
Dan Budwick, Pure Communications, Inc.
973-271-6085
dan@purecommunicationsinc.com
or
Investors - Foundation Medicine
Khaled Habayeb
617-418-2283
ir@foundationmedicine.com

Source: Foundation Medicine, Inc.

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