Genomic Health, Inc. (GHDX)

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Genomic Health, Inc. (GHDX)

Q4 2008 Earnings Call

February 3, 2009 4:30 pm ET


Dean Schorno – Vice President of Finance

Kimberly Popovits – President & Chief Executive Officer

Brad Cole – Chief Operating Officer & Chief Financial Officer


Bruce Cranna – Leerink Swann

Charles Duncan – JMP Securities

Scott Gleason – Stephens Inc.

David Clair – Piper Jaffray

Eric Criscuolo – Thomas Weisel Partners

Raymond Myers – Emerging Growth Equities

George Zavoico – Westport Capital Markets

Kevin Degeeter – Oppenheimer & Co.



Please standby, we are about to begin. Good afternoon. My name is Patrick, and I will be your conference operator today. At this time, I would like to welcome everyone to Genomic Health’s fourth quarter and year-end 2008 financial results conference call. After the prepared remarks, there will be a question and answer session. This call is being recorded.

I would now like to turn the call over to Mr. Dean Schorno, Vice President of Finance. Sir, you may begin your conference.

Dean Schorno

Thank you. Good afternoon everyone and welcome to Genomic Health’s fourth quarter and year-end 2008 financial results conference call. I'm pleased to be joining the team for our quarterly financial calls. Before we begin, I would like to remind you that various remarks that we make on this call that are not historical, including those about our future financial and operating results, future plans and prospects, the success of our business strategy, the impact of clinical data on demand for our tests, economic benefits and value to payers of our tests, growth opportunities, future products, product enhancements and our product pipeline, demand for our tests and drivers of demand, payer coverage and progress in patient access, our investment in our product pipeline and commercial organization, clinical outcomes and timing of clinical studies, our growth potential, our plans for international expansion, the impact of the economy on our business, and our expectations regarding our ability to comply with potential FDA regulation, constitute forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act.

We refer you to our quarterly report on Form 10-Q for the quarter ended September 30, 2008 filed with the SEC, in particular to the section entitled, Risk Factors, for additional information on factors that could cause actual results to differ materially from our current expectations. These forward-looking statements speak only as of the date hereof and we disclaim any obligation to update these forward-looking statements.

With that, I’ll turn the call over to Kim Popovits, President and CEO of Genomic Health.

Kimberly Popovits

Thanks, Dan. Good afternoon everyone, and welcome. As most of you know, we’ve recently announced some management team changes. Randy Scott, formerly our Chairman and CEO, is now full-time Executive Chairman. And I have taken on the role of President and CEO. Randy joins us today, as well as Brad Cole, who is now our Chief Operating Officer and continues to serve as Chief Financial Officer. Steve Shak, our Chief Medical Officer. Joffre Baker, our Chief Scientific Officer and Dean Schorno, our new Vice President of Finance are also with us.

These management changes mark an important milestone for the company reflecting our success and leadership in delivering personalized medicine to patients. Additionally, we expanded our Board in late 2008 to include Ginger Graham, who has expertise in developing and commercializing successful products for pharmaceutical and medical device companies. We believe that with these changes, Genomic Health is well positioned for growth and expansion in the future.

I'm very pleased today to review this past year with you, as it was one of the significant progress and achievement for Genomic Health and demonstrates how we are continuing to turn the promise of Genomics into the practice of medicine. In 2008, we met or exceeded each of the metrics we set as guidance at the beginning of the year.

In the fourth quarter of 2008, we once again saw an increase in product revenue, growth in Oncotype DX test delivered, and a narrowing of our net loss. For the full year 2008, our revenue grew 73% and test delivered grew 62%.

In addition, we reduced our full year net loss to $16.1 million from more than $27 million in 2007, a 41% decrease. Of note, today we believe that we received more breast cancer samples than any other clinical laboratory in the world. Further, as we add to the clinical utility and economic value that our tests can provide to physicians, patients and payers. We realize we must expand our infrastructure to maintain and enhance this valuable service.

As such, we are making a significant increase in our U.S. sales force taking it from 60 reps to 80 as of January. We have demonstrated the impact in physician adoption of Oncotype DX where we have sales rep coverage. By expanding the sales force now, we believe we can reach the nearly 50% of women in the U.S. with node-negative breast cancer, who currently are not benefiting from information provided by our service.

In addition, we believe a larger sales force will allow us to educate physicians about the potential value that Oncotype DX can provide to certain node-positive breast cancer patients. Beyond the sales force, we continue to refine our systems and improve the ways that we communicate with physicians and patients. We continued the expansion of our online physician portal with enhanced real-time delivery of patient results to physicians, as well as the capability for placing Oncotype DX orders online.

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