Cancer test maker Genomic Health Inc. reported a larger fourth-quarter profit on Monday, and said it will start a new genetics business.
Genomic Health said its income grew to $2.6 million, or 8 cents per share, from $1.7 million, or 6 cents per share. Its revenue rose 13 percent, to $53.4 million from $47.1 million. The company said it delivered 17,080 test results with its Oncotype DX test, up 13 percent from a year ago. The Oncotype DX test is designed to predict the risk that a patient's breast or colon cancer will recur.
Analysts expected the company to report a profit of 10 cents per share on revenue of $53.8 million, according to FactSet.
The company said its new subsidiary will focus on commercial applications of the human genome. It will invest $20 million in the business over the next two years.
It will establish the business by March 1 and offer its first commercial service by 2013. Randy Scott will step down as chairman of Genomic health to become CEO of the new venture on March 1, and company President and CEO Kim Popovits will become chairman of Genomic Health. Julian Baker has been named lead independent director.
In 2011, the company's profit climbed to $7.8 million, or 26 cents per share, from $4.3 million, or 14 cents per share. Revenue grew 16 percent, to $206.1 million from $178.1 million. Genomic Health said it returned more than 66,600 Oncotype DX test results.
In 2012, the company expects adjusted income of $5 million to $8 million, excluding its losses related to the new subsidiary. It forecast $230 million to $240 million in revenue and 75,000 to 77,000 Oncotype DX test results.
Analysts expect the company to report a profit of $13.4 million, or 44 cents per share, on $235.9 million in revenue.
Shares of Genomic Health lost $1.45, or 5 percent, to $27.40 in extended trading following the release of the earnings report. They had ended the regular trading session down 49 cents at $28.85.
