Genomic Health, Inc.: Almost at Breakeven

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Genomic Health (NASDAQ: GHDX) released third-quarter earnings on Thursday afternoon, reducing its loss and laying out a path to breakeven in the fourth quarter.

Genomic Health results: The raw numbers


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Q3 2016 Actuals

Q3 2015 Actuals

Growth (YOY)


$82.3 million

$73.6 million


Loss from operations

($3.0 million)

($5.4 million)


Loss per share




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    Data source: Genomic Health press release. YOY = year over year.

    What happened with Genomic Health this quarter?

    What management had to say

    Commenting further on the results from the validation study and competition with Myriad Genetics, Genomic Health's chief medical officer, Phil Febbo, said: "We believe this unique combination of near- and long-term endpoints distinguishes our assay from a growing number of competitors, based on the value it brings to the patient/physician shared decision regarding the optimal management of clinically low-risk prostate cancer."

    Even as the dominant player in the invasive breast cancer test market, Kim Popovits, Genomic Health's chairman, CEO, and president, thinks the company can go higher: "[S]itting today around 55%-ish [market penetration], and tossing a number out, could we get to 80%, 75%? We really believe that's the case."

    Looking forward

    Management is looking for double-digit revenue growth in the fourth quarter, which would put it at the midpoint of its full-year 2016 guidance.

    For the income line, Genomic Health is looking to break even in the fourth quarter, which includes about $2 million in one-time expenses to integrate the AR-V7 test, which it'll start selling for Epic Sciences next year. Genomic Health was able to accelerate its path to breakeven because it's no longer paying licensing fees for one of the techniques -- polymerase chain reaction, or PCR -- that it has to perform to process its tests.

    Moving from breakeven toward profitability shouldn't be too difficult next year, given the company's operating leverage. For 2016, management estimates that for every extra dollar of revenue over its 2015 level, it's creating $0.40 of operating income.

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