Welcome to Dx Digest, where FierceMedicalDevices highlights the highs and sometimes lows of the past week in the diagnostics industry. Illumina kicked things off by unveiling a $250 million share repurchase program, weeks after the company issued a profit warning following poor sales of its desktop sequencer. Lab giant Quest Diagnostics inked a deal with lab data analytics firm Medivo to use its data sets to help match patients to new drug therapies. Last but certainly not least, Foundation Medicine reported a beat on revenues for the third quarter, even though it missed the Street's expectations on earnings. Read on for the details. And as always, feel free to contact us with any comments or questions. -- Emily Wasserman (email | Twitter)
Illumina rolls out $250M share repurchase program
Illumina ($ILMN) has been sliding down a slippery slope lately, with sluggish Q3 sales of its NextSeq Series Desktop Sequencer and earnings falling below analysts' expectations. Last month the company issued a profit warning, sending its shares down 10% for the day and leaving most speculating about Illumina's next move.
Now the San Diego, CA-based sequencing giant is trying to move on to calmer waters, launching a $250 million share repurchase program to give business a boost and completing a $96 million buyback that it started before it reported Q3 earnings. The move helps Illumina as it chases "the many large, untapped market opportunities ahead" and also shows the company's "strong financial position" as it invests in long-term growth, Illumina CFO Marc Stapley said in a statement. Statement
Quest Diagnostics teams with Medivo for pharma analytics initiative
Quest Diagnostics ($DGX) is working hard to diversify its offerings, striking a deal in September with health IT outfit Inovalon ($INOV) to roll out a cloud-based analytics platform for healthcare providers. In its latest move, the company is joining forces with data analytics firm Medivo, lending its data sets to the company to help physicians find better drug therapies for patients.
Under the terms of the deal, Quest will offer its lab data analyses to Medivo, allowing the company to combine the information with other data sets to see which individuals would be good fit for new treatments. One possible application would be for the new class of cholesterol-lowering meds, PCSK9 inhibitors, which are used in patients who do not respond to statins. Quest's genomic data could also help match patients to orphan drugs for rare diseases, the company said in a statement.
"Our agreement with Medivo is the latest in a series of steps Quest has taken this year to further leverage our lab data to drive better outcomes," David Freeman, general manager of Quest Diagnostics Information Ventures, said in a statement. "Through collaborations with progressive healthcare solutions companies like Medivo, and our own clinical and technology expertise, we are committed to providing insights that are actionable, not just for physicians and patients, but for therapy developers, health plans and health systems." Release
Foundation Medicine trips in Q3 amid reimbursement woes
It hasn't been a good few months for Foundation Medicine ($FMI). The company has been facing slower-than-expected reimbursement for its tests, reporting Q2 revenues that missed the Street's expectations and adjusting its clinical volume and sales guidance as a result. Now, Foundation is revealing more bad news in Q3, with earnings that fell short of analysts' predictions despite a narrow beat on revenues.
The Cambridge, MA-based company brought in $25.4 million during the third quarter, passing analysts' estimates of $24 million. But Foundation missed the mark on earnings by 4 cents as clinical testing volume continued to fall. The company is expecting between 32,000 and 33,000 clinical tests in 2015, compared to the 35,000 and 38,000 range that it predicted in Q2.
Still, Foundation doesn't seem deterred by the numbers. The company has "work to do" in the clinical testing market, CEO Dr. Michael Pellini said in a statement. But its deal with testing titan Roche ($RHHBY) could give it a boost as the companies continue to sink funds into R&D. "We believe we are well-positioned for continued growth over the near and long term with our fully integrated, diversified business, a growing pipeline of innovative products, a strong balance sheet and a global partner in Roche," Pellini said. More