On May 2, 2018, Foundation Medicine held its Q1-2018 quarterly earnings call, which is available online here. See also summary at Genomeweb here. Q1 quarterly revenue reached $53M, up from $26M one year earlier.
Definitely Pan Cancer Coverage at CMS
Based on explicit analyst questions, FMI confirmed that CMS had confirmed that it has pan cancer coverage in solid tumors. FMI pointed to its label, which has both an indication set for several CDx genes and also a clearly stated FDA indication for pan solid tumor gene profiling. The analyst emphasized that the NCD interpretation was perplexing to observers. I called it a "Rubik's cube" problem in a recent blog and white paper -- but my analysis then seems to concord with FMI statements this week, and by proxy, with CMS. See that blog here.
Definitely Applying for ADLT Status
FMI also announced it was definitely applying for ADLT status. It will be paid at local contractor rates since then; at least one announcement stated its local contractor rate with Palmetto was $3415. (In the earnings call, FMI referred 3 times to Palmetto but never to the MAC in its home region, Massachusetts.)
ADLT rules allow local MAC payment rates until an ADLT decision is made by CMS (here, likely July 1), then, 9 months of payment at the list rate, and then, payment reset annually to a market rate. There is a clawback option if the 9 month list rate is too high above the retrospectively confirmed first year market rate. CMS released ADLT instructions in mid March (blog with CMS links and my discussion, here). I pointed out that labs have a lot of options for controlling the first-year data that results in the second-year median rate (here).
Definitely Shooting for TMB in an FDA Liquid Biopsy Test
FMI emphasized that its ACT liquid biopsy test now entering FDA review would include tumor mutational burden (TMB) information.
I'm not a card carrying regulatory expert, but based on recent FDA approvals, getting a pan-cancer label out of the FDA isn't a shoo-in and it's a white space to do it in the liquid biopsy sphere. As part of their November 2017 FDA reviews with pan-solid-cancer indications, FMI provided data from 80,000 blocks across 43 cancers, and MSK IMPACT provided >10,000 blocks across 17 cancers. (See my Rubik's cube article cited above).
Revenue Per Test Unit
Biopharma revenue tests were reported as quarterly 7,184 units for $27.8M revenue ($3869 per unit) and one year ago 1,802 units for $9.5M revenue ($5272 per unit.) Clinical tests were reported as 21,861 units for $18.8M revenue ($860 per unit) versus one year ago 13,900 units for $11.6M revenue ($833 per unit). Note that revenue recognized per clinical test unit may lag as test volume grows ahead of collection cycles. Still. FMI noted it has switched from cash- to accrual-based clinical revenue. If I read correctly, they state that cash-based Q1 clinical revenue would have been a bit higher, $22M, than the accrual-based Q1 clinical revenue figure.
Share Price
FMI's share price is about $70, up from about $50 just before the draft NCD was released in November. However FMI's share price peaked at $86 in February, before the NCD was finalized. Market cap is $2.6B.
