Smaller Publicly-Traded Labs Report Mixed Results

The publicly-traded esoteric laboratories reported mixed results for the fourth quarter and the full calendar year of 2015.

The largest of those labs, Miami-based OPKO Health, Inc., which vastly increased its size with last year’s acquisition of Bio-Reference Laboratories, broke into the black during the fourth quarter ending Dec. 31. It reported net income of $1.6 million on revenue of $276.2 million, of which $220 million was revenue from Bio-Reference operations. That compares to a loss of $53.5 million on revenue of $25.5 million for the fourth quarter of 2014.

For calendar 2015, OPKO reported a loss of $31.4 million on revenue of $491.7 million. For 2014, it reported a loss of $174.6 million on revenue of $91.1 million.

The company did not issue any guidance for 2016, but Executive Vice President Steven Rubin told analysts that the company had been granted a CPT code for its 4Kscore prostate cancer test, likely boosting the chances of it receiving steady reimbursement from payers. Company officials said they are seeking a price at about mid-point of the test’s current $1,900 retail price.

By contrast, Cambridge, Mass.-based Foundation Medicine continued to operate in the red despite some fairly dramatic business growth. It reported a net loss of $19 million on revenue of $26.1 million for the fourth quarter. That compares to a net loss of $13.3 million on revenue of $18.7 million for the fourth quarter of 2015.

The company said it performed nearly 33,000 of its Foundation- One genomic cancer tests during 2015, up 36 percent from 2014.

For calendar 2015, Foundation reported a net loss of $89.6 million on revenue of $93.2 million, compared to its 2014 loss of $52.2 million on revenue of $61.1 million.

Foundation’s 2016 guidance includes revenue projection in the range of $110 million to $120 million. However, expenses are projected in the range of $175 million to $185 million, suggesting another significant loss for the calendar year. It expects test volume of between 37,000 and 40,000.

Foundation’s 2016 guidance includes revenue projection in the range of $110 million to $120 million. However, expenses are projected in the range of $175 million to $185 million, suggesting another significant loss for the calendar year. It expects test volume of between 37,000 and 40,000.

“If we continue to trend a single marker companion diagnostic, oncologists—not to mention payers—will quickly become overwhelmed with the complexity around selecting the appropriate test for each patient,” Pellini told analysts. “Our strategy is to eliminate the complexity and [remove] the guess work for physicians by working towards a universal companion diagnostic.”

Fort Myers, Fla.-based NeoGenomics reported a $5.2 million loss for the fourth quarter on revenue of $27.3 million. That compares to net income of $1.3 million on revenue of $25 million for the fourth quarter of 2014.

For calendar 2015, NeoGenomics reported a loss of $5.6 million on revenue of $99.8 million. For 2014, it reported net income of $2.2 million on revenue of $87.1 million. Much of that loss was attributed to extra expenses due to its acquisition of Clarient, Inc., which closed on Dec. 30.

NeoGenomics’ acquisition means a huge boost in business moving forward. The company’s 2016 guidance includes revenue of $240 to $250 million, and improved profitability in every quarter of this year.

Takeaway: The smaller specialty laboratories are reporting growth but only mixed results regarding profitability.