NEW YORK – Genomic Health reported Monday morning that its second quarter revenues rose 19 percent year over year, beating the consensus Wall Street estimate.
For the three months ended March 31, the company's total revenues were $114.1 million, compared with $95.6 million in the second quarter of 2018. Analysts on average had predicted revenues of $110.6 million.
Paralleling its earnings release, Genomic Health and Exact Sciences entered into a merger agreement for $2.8 billion in cash and stock. The acquisition, which values Genomic Health at $72 per share and has been unanimously approved by the boards of both companies, is expected to be completed by the end of 2019.
Though the news today eclipses much of the company's other recent milestones, CEO, President, and Chairman Kim Popovits also highlighted Germany's recent nationwide reimbursement decision for the Oncotype DX Breast Recurrence Score test, which followed the conclusion of the German Institute for Quality and Efficiency in Health Care (IQWiG)'s endorsement of the test.
The company's US product revenue was up about 18 percent to $96.0 million, compared with $81.4 million in the same quarter last year. US sales of the Oncotype DX Breast Recurrence Score test were $82.2 million compared with $72.5 million in Q2 2018, an increase of about 13 percent.
Test revenue from Genomic Health's Oncotype DX Genomic Prostate Score tests was up 42 percent in the US to $9.6 million from $6.7 million in the same quarter last year.
The company said it delivered more than 38,470 Oncotype test results during the quarter compared to 33,590 results in the same period of 2018. US breast cancer test volume was up 13 percent year over years, and prostate cancer volume was up 12 percent compared to Q2 2018.
International product revenue during the quarter rose 28 percent to $18.1 million from $14.2 million for the second quarter of 2018. On a non-GAAP constant-currency basis international test revenue rose about 33 percent year over year.
The company delivered 21 percent more tests in the second quarter of 2019 than in the same period last year, and international test volume represented about a quarter of its total test volume during the quarter.
Genomic Health's net income in Q2 2019 was $16.0 million, or $0.42 per share, compared to $8.3 million, or $0.23 per share in the second quarter of 2018.
The company's R&D costs were flat year over year at $15.3, while SG&A costs rose to $65.7 million from $58.8 million.
The firm ended the quarter with cash and cash equivalents totaling $90.9 million and short-term marketable securities of $152.6 million.
Based on the results, Genomic Health updated its revenue guidance for the year, now projecting between $448 million and $452 million, representing growth of 14 percent to 15 percent, from a previous guidance range of $436 million to $448 million. EPS is now expected to be in the range of $1.44 to $1.54, compared to previous guidance of $1.23 to $1.38.
Following the Exact Sciences acquisition announcement, Piper Jaffray's Bill Quirk wrote in a note to investors that the investment bank is downgrading Genomic Health to neutral based on its share price being within approximately 2 percent of its price and deal targets.
In late morning trading on Nasdaq, Genomic Stock's health was up about 3 percent to $70.56.