Genomic Health, Inc. Q2 2009 Earnings Call Transcript

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Genomic Health, Inc. (GHDX)

Q2 2009 Earnings Call Transcript

August 4, 2009 4:30 pm ET

Executives

Dean Schorno - VP, Finance

Kim Popovits - President and CEO

Brad Cole - COO and CFO

Steve Shak - Chief Medical Officer

Analysts

David Clair - Piper Jaffray

Peter Lawson - Thomas Weisel Partners

Charles Duncan - JMP Securities

Scott Gleason - Stephens Inc.

Ashim Anand - Natixis Bleichroeder

Abigail Davis [ph] - JPMorgan

Matthew Scalo - Canaccord Adams

Kelley Roche - Leerink Swann

Presentation

Operator

Good afternoon. My name is Kairy and I will be your conference operator today. At this time, I would like to welcome everyone to the Genomic Health second quarter 2009 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator instructions)

I would now like to turn the conference 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 second quarter 2009 financial results conference call.

Before we begin, I would like to remind you that various remarks we make on this call that are not historical, including those about our future financial 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 and market opportunities, future products, product enhancements and our product pipeline, demand for our test and drivers of demand, payer coverage and pricing, progress in patient access, our investment in our product pipeline and commercial organization, clinical outcomes and timing of clinical studies, our plans for international expansion, the impact of the economy in 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 annual report on Form 10-Q for the quarter ended March 31, 2009 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.

Kim Popovits

Thanks, Dan. Good afternoon everyone, and welcome. Also with us today are Randy Scott, our Executive Chairman; Brad Cole, our Chief Operating Officer and Financial Officer; Steve Shak, our Chief Medical Officer; and Joffre Baker, our Chief Scientific Officer.

I will begin the call today with specific highlights and accomplishments. Brad will review our second quarter 2009 financial results and commercial progress and I will close the comments on our pipeline, highlighting how we are well positioned for future growth and furthering our mission of enhancing the quality of treatment decisions for patients with cancer.

In the second quarter, we delivered solid revenue growth both year-over-year and quarter over quarter, as well as narrowed our net loss and increased our total cash. Our Oncotype DX breast cancer test has now guided treatment decision for more than 100,000 patients worldwide, since it became available in 2004.

This milestone represents evidence that personalized treatment decisions are becoming standard practice for early-stage breast cancer patients and further supports the successful execution of our business model focused on delivering high value genomic diagnostics to clinical practice.

In the second quarter, we achieved two additional milestones for increasing product patient access to Oncotype DX. We secured a contracted rate of reimbursement with Anthem for node negative breast cancer patients and expanded coverage of Medicare for node positive patients with up to three positive lymph nodes.

Going forward, we will continue our efforts to expand additional payer policies to include patients with either micrometastasis or node positive disease. With the inclusion of node positive patients, we now have an addressable breast cancer population in the United States of more than 100,000 patients each year.

Further, as the Oncotype DX breast cancer test gains recognition of standard of care in the US, the opportunity for us to deliver its benefits to patients around the world continues to grow. In Western Europe, Japan, the Americas, and Israel we are building commercial capabilities and are targeting a worldwide addressable breast cancer population of at least 300,000 patients.

The recently announced recommendation of the St. Gallen International Consensus Panel on the Primary Therapy of Early breast cancer provides additional support for our efforts in Europe. In June, they recommended for the first time that validated multigene assays be considered as an adjunct to standard measures in helping to determine chemotherapy benefits for early-stage breast cancer patients.

These new treatment guidelines like those established by ASCO and NCCN in the US represent a significant advancement for the role of validated molecular diagnostics in breast cancer treatment planning. We believe these guidelines will support the expansion of Oncotype DX outside the US and believe in the establishment of favorable reimbursement policies, which is a necessary step to ensuring patient taxes in his important region.

As we have mentioned in past calls, we also anticipate that country specific studies will play a large role in securing reimbursement with national healthcare system. In this regard, we are encouraged to report that we recently initiated a Taiwanese, Chinese population study, in collaboration with the National Taiwan University.

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