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| Dr. Michael Pellini, CEO of Foundation Medicine |
Foundation Medicine ($FMI) provided additional detail about Roche's ($RHHBY) multimillion-dollar investment in the cancer-focused molecular diagnostic company during its Q1 2015 earnings call.
"The primary investment and tender offer closed in early April, simultaneously resulting in $250 million in gross proceeds for Foundation Medicine and the commencement of our R&D and commercial collaboration agreements with Roche," said Foundation Medicine CEO Michael Pellini on the call. "This validation from Roche together with our strengthened balance sheet enables strategic investments in the business today aimed at accelerating the achievement of our broad corporate initiatives supporting differentiation and growth over the immediate and long-term and on a global scale."
Chief Commercial Officer David Daly said the joint medical education campaign is expected to launch in the second half of the year. He said it is "an initiative that adds 1,000 new touchpoints while enabling our team to focus on physician adoption," adding "Internationally, we're kicking off with Roche the 12-month business planning process for our ex-U.S. commercialization agreement."
Foundation Medicine is also supporting a number of Roche R&D programs with its molecular information platform, such as the Big Pharma's PDL-1 inhibitor to treat non-small cell lung cancer.
Securing reimbursement from private payers is another focus of the company.
"The first quarter in particular brought with it (an increase) in activity from several of the more innovative regional and national payers who are embracing the science and we believe are migrating towards integrating molecular information into clinical practice," said Foundation Medicine Chief Financial Officer Jason Ryan. "On the other hand, we've also found there are certain payers whose guidelines and policies simply have not kept pace with innovation. Those individual payers tend to be less willing to consider the growing body of evidence supporting comprehensive genomic profiling. So in essence for those payers, Foundation Medicine is subsidizing the cost of testing for their members who are struggling with disease and looking for potential solutions."
As an example, the company revealed that the reorder rate is higher at academic medical centers than at smaller community oncology centers, and said it would continue to offer financial assistance to those who need it.
In addition to launching new products, Foundation Medicine is focused on increasing access to its already-existing molecular information. "As we continue to enhance our customer experience, we're focused on two key initiatives technologically, first, supporting EMR (electronic medical records) integrations to make it easier to order our tests and enhance our results reporting; and second, our ongoing deployment of ICE 2 to uniquely enable physician networking capabilities," Daly said.
He also said the company is planning to hire 300 employees to drive adoption and customer satisfaction.
Overall, the company reported revenues of $19.3 million in Q1 2015, up from $11.5 million in the Q1 2014 quarter of 2014, but it still lost almost $17 million during the quarter, up from $12.1 million a year ago. The company performed 7,854 tests during the quarter, a year-over-year increase of 67%.
Revenue from pharmaceutical (as opposed to clinical) customers of $8.2 million represents a 90% annualized increase. Foundation Medicine said that number does not include any revenue from Roche.
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