Foundation Medicine, Inc.
February 23, 2016
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Foundation Medicine Announces 2015 Fourth Quarter and Year-End Results, Recent Highlights and 2016 Outlook

CAMBRIDGE, Mass.--(BUSINESS WIRE)-- Foundation Medicine (NASDAQ: FMI) today reported financial and operational results for the fourth quarter and year ended December 31, 2015. Highlights for the quarter and year included:

The company reported total revenue of $26.1 million in the fourth quarter of 2015, compared to $18.7 million in the fourth quarter of 2014. Revenue from clinical testing in the fourth quarter of 2015 was $12.0 million, compared to $10.3 million in the fourth quarter of 2014. Total revenue for the year ended December 31, 2015 was $93.2 million, compared to $61.1 million in 2014.

The company reported 8,286 clinical tests, which includes 7,382 FoundationOne® tests and 904 FoundationOne Heme tests, in the fourth quarter of 2015, a 15% increase from the total reported clinical tests in fourth quarter of 2014. An additional 3,104 tests were reported to pharmaceutical partners in the fourth quarter of 2015. The company reported 32,998 clinical tests, which includes 29,076 FoundationOne tests and 3,922 FoundationOne Heme tests, for the full year 2015, a 36% increase compared to the total reported clinical tests in 2014.

Revenue from pharmaceutical partners was $14.1 million in the fourth quarter, representing a 68% increase from the same period in 2014 and a 20% increase from the third quarter of 2015. For the full year, revenue from pharmaceutical partners was $44.0 million, an 80% increase from the $24.4 million in 2014. These increases in revenue from pharmaceutical partners highlight the company's leading and broadening role within targeted oncology drug development.

"In 2015, Foundation Medicine made continued progress across the oncology ecosystem by delivering valuable insights from our molecular information platform to clinicians, payers and biopharmaceutical companies," stated Michael J. Pellini, M.D., chief executive officer of Foundation Medicine. "As we look ahead to 2016, we are poised for continued growth and expect to drive value both near and long term through product innovation, commercial execution and further integration of our molecular information platform to enable precision medicine."

The company's cancer knowledgebase, FoundationCORE, grew to more than 68,000 clinical cases. FoundationCORE is a unique asset and critical component of the value that Foundation Medicine delivers to its biopharmaceutical and physician customers.

Total operating expenses for the fourth quarter of 2015 were approximately $34.0 million compared with $25.1 million for the fourth quarter of 2014. For the full year, operating expenses were $143.5 million, compared to $86.9 million in 2014. Net loss was $19.0 million in the fourth quarter of 2015, or a $0.55 loss per share, and net loss for the full year was $89.6 million, or a $2.73 loss per share. At December 31, 2015, the company held approximately $232.3 million in cash, cash equivalents and marketable securities.

Recent Highlights:

2016 Outlook

Conference Call and Webcast Details

The company will conduct a conference call today, Tuesday, February 23rd at 4:30 p.m. Eastern Time to discuss its financial performance for the fourth quarter and year ended December 31, 2015 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 43868145. 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 and sarcomas, provide a comprehensive genomic profile to identify the molecular alterations in a patient's cancer and match 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 http://www.FoundationMedicine.com or follow Foundation Medicine on Twitter (@FoundationATCG).

Foundation Medicine® and FoundationOne® are registered trademarks, and PatientMatchTM, GeneKitTM, SmartTrialsTM, FoundationCORETM, and FoundationACTTM are trademarks, of Foundation Medicine, Inc.

Cautionary Note Regarding Forward-Looking Statements for Foundation Medicine

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 benefits of our products to clinicians, payers and biopharmaceutical companies in the treatment of cancer; the number of tests to be conducted, the generation of revenue, and the incurrence of operating expenses in 2016; the timing of launching new products, including a ctDNA assay; and payer support for comprehensive genomic profiling, including coverage decisions by Medicare and third-party payers. 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 Foundation Medicine's test, revenue or operating expense projections may turn out to be inaccurate because of the preliminary nature of the forecasts; the launch of a ctDNA clinical assay is delayed or discontinued; the company's expectations and beliefs regarding the future conduct and growth of Foundation Medicine's business are inaccurate; Foundation Medicine is unable 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, which is on file with the Securities and Exchange Commission, as well as other risks detailed in Foundation Medicine's 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.

FOUNDATION MEDICINE, INC.

Consolidated Statements of Operations

(In thousands, except share and per share data)

(unaudited)

       
Three Months Ended   Year Ended

December 31,

December 31,
2015   2014 2015   2014
Revenue $ 26,051 $ 18,680 $ 93,203 $ 61,079
Costs and expenses:
Cost of revenue 11,195 8,022 39,431 27,434
Selling and marketing 12,400 8,244 49,030 28,997
General and administrative 8,804 8,976 50,614 27,302
Research and development   12,765   7,839   43,883     30,629  
 
Total costs and expenses   45,164   33,081   182,958     114,362  
 
Loss from operations (19,113 ) (14,401 ) (89,755 ) (53,283 )
Other income (expense):
Interest income (expense), net 93 1 124 (42 )
Other income (expense), net     1,103       1,103  
 
Total other income (expense), net   93   1,104   124     1,061  
 
Net loss $ (19,020 ) $ (13,297 ) $ (89,631 ) $ (52,222 )
 
Net loss per common share applicable to common stockholders, basic and diluted $ (0.55 ) $ (0.47 ) $ (2.73 ) $ (1.87 )
 
Weighted-average common shares outstanding, basic and diluted   34,454,183   28,165,590   32,836,219     27,954,327  

FOUNDATION MEDICINE, INC.

Condensed Consolidated Balance Sheets

(In thousands)

(unaudited)

   
December 31, December 31,
2015 2014
Assets
Current assets:
Cash and cash equivalents $ 117,763 $ 72,080
Marketable securities 89,607
Accounts receivable, net 7,765 9,894
Inventory 7,992 4,809
Prepaid expenses and other current assets   6,517   2,865
Total current assets 229,644 89,648
Marketable securities 24,939
Property and equipment, net 41,333 21,015
Restricted cash 1,395 864
Other assets   678   411
Total assets $ 297,989 $ 111,938
 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 10,469 $ 7,263
Accrued expenses and other current liabilities 12,822 7,414
Deferred revenue 4,459 340
Current portion of deferred rent   2,146   1,429
Total current liabilities 29,896 16,446
Other non-current liabilities 10,404 9,323
Total stockholders' equity   257,689   86,169
Total liabilities and stockholders' equity $ 297,989 $ 111,938

Media Contact:
Dan Budwick, Pure Communications, Inc.
973-271-6085
dan@purecommunicationsinc.com
or
Investor Contact:
Kimberly Brown, 617-418-2215
ir@foundationmedicine.com
or
Matt Clawson, 949-370-8500
matt@purecommunicationsinc.com

Source: Foundation Medicine

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