Genomic Health (GHDX) racked up its 15th consecutive quarter of improved profitability on an adjusted basis, although investors were a little wary of what the solid first quarter of 2019 means for the rest of the year.

Genomic Health results: The raw numbers

Metric Q1 2019 Q1 2018 Year-Over-Year Change


$108.8 million

$92.6 million


Income from operations

$11.5 million

($4.4 million)


Earnings per share




Data source: Genomic Health.

What happened with Genomic Health this quarter?

  • Changes in GAAP revenue recognition boosted overall revenue by 3 percentage points compared to the year-ago quarter.
  • The company delivered 37,580 Oncotype DX tests, an increase of 16% compared to the year-ago quarter.
  • International sales led the way, increasing 29% year over year, which would have been a whopping 32.9% growth on a constant currency basis.
  • Sales of the Oncotype DX Breast Recurrence Score test in the U.S. went up 12.5% as the company continues to benefit from increased usage following the presentation of the Trial Assigning Individualized Options for Treatment (TAILORx) results.
  • The launch of the Oncotype DX Genomic Prostate Score (GPS) test in the U.S. continues to gain traction, with sales up 47%, although it still makes up less than 8% of overall sales. Some of the boost is coming from improved pricing for patients on Medicare and hikes in private insurance reimbursement, but the volume of tests delivered was still up an impressive 25%.
Male doctor working at a desktop computer with a stethoscope hanging on his shoulders.

Image source: Getty Images.

What management had to say

With U.S. reimbursement for the breast cancer test largely worked out, Kimberly Popovits, Genomic Health's chairman, president, and CEO, highlighted the move to get more people covered for its prostate cancer tests -- the GPS and the newer AR-V7:

Multiple private insurers established new coverage for the Oncotype DX Genomic Prostate Score, or GPS, test during the first quarter, bringing the total number of U.S. covered lives to more than 114 million, including Medicare. We also made progress securing additional reimbursement for the Oncotype DX AR-V7 Nucleus Detect test, building on the Medicare coverage that was established in December. During the first quarter, we secured coverage from our first private payer, bringing the total number of US covered lives to more than 61 million.

CFO G. Bradley Cole talked about developing an in vitro diagnostic (IVD) version of the Oncotype DX breast cancer test on the Idylla platform and its expected average selling price (ASP):

We are not expecting a big lift from IVD pricing. We're expecting a big lift from access to the market to build and grow the penetration in these key markets in Western Europe. It is the primary driver of this program and it's less about ASP and more about access.

Looking forward

Management stuck with its 2019 revenue guidance of $436 million to $448 million, an 11% to 14% increase compared to last year, signifying that revenue growth will slow in the second half of the year. That shouldn't be all that surprising given the mid-year 2018 TAILORx results created a harder year-over-year comparison for the second half of the year.

The biggest factor investors should look out for in determining whether the company can hit the high end of management's guidance comes from national reimbursement coverage in Germany, which is expected this quarter.

Looking further ahead, the IVD breast test on the Idylla platform will begin clinical validation at the end of this year, setting up a European launch at the end of 2020. Genomic Health recently expanded its partnership with Biocartis, the owner of the Idylla platform, to include Genomic Health's prostate cancer test. The plan for that test is to go after the U.S. first with a potential launch in the 2022 time frame after gaining approval from the Food and Drug Administration.