Business Analysis of Foundation Medicine

Foundation Medicine, Inc. provides various molecular information products in the United States.

The company’s molecular information platform includes proprietary methods and algorithms to analyze specimens across various types of cancer, as well as for incorporating that information into clinical care; and offers genomic information about each patient’s individual cancer, enabling physicians to optimize treatments in clinical practice and biopharmaceutical companies to develop targeted oncology therapies.

It provides clinical products, such as FoundationOne for solid tumors; FoundationOne Heme for blood-based cancers, or hematologic malignancies, including leukemia, lymphoma, and myeloma, as well as sarcomas and pediatric cancers; Foundation Assay for Circulating Tumor; FoundationFocus CDxBRCA, a diagnostic assay to aid in identifying women with ovarian cancer.

The company also offers FoundationCORE, a knowledgebase to publish scientific and medical advances, and foster relationships throughout the oncology community. In addition, it has strategic collaboration agreements with WuXi PharmaTech Inc.; F. Hoffmann-La Roche Ltd.; and Genentech, Inc.

The company was founded in 2009 and is headquartered in Cambridge, Massachusetts. Foundation Medicine, Inc. is a subsidiary of Roche Holdings, Inc.

BUSINESS ANALYSIS OF FOUNDATION MEDICINE

The Healthcare Services Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business.

An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Foundation Medicine compares against the industry on the major performance indicators.

This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Foundation Medicine to its stakeholders.

R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.

Here is the performance snapshot of Foundation Medicine with an interactive chart.

1. Revenue Growth: Foundation Medicine reported a revenue growth of 25.4% year-on-year during 2016. Healthcare Research Services Industry grew at 14.8% in the same period
2. COGS share of Revenues: As a percentage of revenue, Foundation Medicine spent 48.6% of its total revenues on COGS. Healthcare Research Services industry average (COGS share of revenue) in the same period was 68.6%
3. R&D; share of Revenues: As a percentage of revenue, Foundation Medicine spent 57.6% of its total revenues on R&D.; Healthcare Research Services industry average R&D; spending in the same period was 0.4%
4. SG&A; share of Revenues: As a percentage of revenue, Foundation Medicine spent 91.2% of its total revenues on Sales, Marketing, and General Administration (SG&A;). Healthcare Research Services industry average SG&A; spending in the same period was 16.2%
5. Inventory share of Revenues: As a percentage of revenue, Foundation Medicine spent 8.9% of its total revenues on Inventories. Healthcare Research Services industry average Inventory spending in the same period was 1.9%
6. Accounts Payable share of Revenues: As a percentage of revenue, Foundation Medicine invested 10.2% of its total revenues on Accounts Payable (A/P) Healthcare Research Services industry average Accounts Payable investment in the same period was 10.4%
7. Accounts Receivable share of Revenues: As a percentage of revenue, Foundation Medicine invested 8.7% of its total revenues on Accounts Receivable (A/R). Healthcare Research Services industry average Accounts Receivable investment in the same period was 21.6%
8. PP&E; share of Revenues: As a percentage of revenue, Foundation Medicine invested 35.5% of its total revenues on Property, Plants, and Equipments (PP&E;). Healthcare Research Services industry average PPE investment in the same period was 15.2%
9. Intangibles share of Revenues: Foundation Medicine Intangibles share of Revenues details are not available because either company does not share the data or we do not have it
10. Net Margins: Foundation Medicine Net Margins in the year 2016 were -96.9%. Healthcare Research Services industry average Net Margins in the same period were 4.6%

SECTOR AND INDUSTRY ASSOCIATION OF FOUNDATION MEDICINE

For the purpose of performance benchmarking of a company with a sector or industry average, R&P; Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries. For high-level analysis purposes, related/similar sectors are grouped into sector groups.

Foundation Medicine is associated with Healthcare Sector Group, Healthcare Services Sector and Healthcare Research Services Industry.

Healthcare Services sector is comprised of the following industries: Medication Stores, PBM and Distributors; Healthcare Payers; Healthcare Providers; Medical Software; Healthcare Research Services. The definitions for each of the industries is as follows:

• Medication Stores, PBM and Distributors industry includes nationwide medication store chains, pharmacy benefit management (PBM) companies, and medication distributors. Medication stores also offer walk-in clinics and related pharmacy services. Distributors distribute branded and generic pharmaceutical and other healthcare products to hospitals, pharmacies and other healthcare providers. PBMs are primarily responsible for developing and maintaining the formulary, contracting with pharmacies, negotiating discounts and rebates with medication manufacturers, and processing and paying prescription medication claims.
• Healthcare Payers industry includes healthcare insurance companies that finance or reimburse the cost of health services. These companies also offer collaborative care, population health management, healthcare technology, Pharmacy Benefit Management, analytics, consulting and administrative services.
• Healthcare Providers industry consist primarily of hospitals but recent changes in the health services industry have contributed to both increasing numbers of other types of facility providers. Companies in this industry include traditional healthcare providers and emerging healthcare facility providers like ambulatory surgery centers, behavioral healthcare facilities, dialysis clinics, home health care companies and others.
• Medical Software industry includes companies that offer any software item or system used within a healthcare context. These companies offer standalone software used for diagnostic, therapeutic purposes, clinical financial and operational purposes.
• Healthcare Research Services industry includes companies that offer biopharmaceutical development services, commercial outsourcing services; commercial pharmaceutical sales and service organizations, consulting, health information analytics and technology consulting.

INDUSTRY RANKING OF FOUNDATION MEDICINE

With $116.9 million revenues, Foundation Medicine ranked number 11 of all the companies in the US Healthcare Research Services industry. There were a total of 14 public companies in the US Healthcare Research Services industry that had revenues greater than $50 million during 2016.

The top-10 companies in the US Healthcare Research Services industry by revenues during 2016 were:

1. LabCorp ($9.6 billion)
2. QuintilesIMS ($6.9 billion)
3. Parexel International ($2.4 billion)
4. PRA Health Sciences ($1.8 billion)
5. Charles River Laboratories International ($1.7 billion)
6. INC Research ($1.6 billion)
7. Radnet ($884.5 million)
8. Albany Molecular Research ($570.5 million)
9. Medpace Holdings ($421.6 million)
10. NeoGenomics ($244.1 million)

BUSINESS MODEL ANALYSIS (BMA) FRAMEWORK

We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.

NEXT STEPS

• Conduct a holistic benchmarking; to identify and target additional sources of value
• Get in touch with us to learn more about Business Model Analysis Framework
• Get free data, charts, and analysis of Foundation Medicineand its peers on select key performance indicators by clicking the reports provided below

INDUSTRY PEERS AND COMPETITORS OF FOUNDATION-MEDICINE

Albany Molecular Research (AMRI) Business Analysis – Analyze Historical Performance, Strategic…

Albany Molecular Research Inc with $570 million revenues in the year 2016 was the number 8 Healthcare Research Services company. Read this report to know the top competitors of Albany Molecular Research and identify growth and cost optimization opportunities of Albany Molecular Research

Medpace Holdings (MEDP) Business Analysis – Analyze Historical Performance, Strategic Priorities,…

Medpace Holdings, Inc. with $422 million revenues in the year 2016 was the number 9 Healthcare Research Services company. Read this report to know the top competitors of Medpace Holdings and identify growth and cost optimization opportunities of Medpace Holdings

NeoGenomics (NEO) Business Analysis – Analyze Historical Performance, Strategic Priorities, And…

NeoGenomics Inc with $244 million revenues in the year 2016 was the number 10 Healthcare Research Services company. Read this report to know the top competitors of NeoGenomics and identify growth and cost optimization opportunities of NeoGenomics

National Research (NRCIB) Business Analysis – Analyze Historical Performance, Strategic Priorities,…

National Research Corp with $109 million revenues in the year 2016 was the number 12 Healthcare Research Services company. Read this report to know the top competitors of National Research and identify growth and cost optimization opportunities of National Research

Enzo Biochem (ENZ) Business Analysis – Analyze Historical Performance, Strategic Priorities,…

Enzo Biochem Inc with $103 million revenues in the year 2016 was the number 13 Healthcare Research Services company. Read this report to know the top competitors of Enzo Biochem and identify growth and cost optimization opportunities of Enzo Biochem

Tabula Rasa Healthcare (TRHC) Business Analysis – Analyze Historical Performance, Strategic…

Tabula Rasa Healthcare, Inc. with $94 million revenues in the year 2016 was the number 14 Healthcare Research Services company. Read this report to know the top competitors of Tabula Rasa Healthcare and identify growth and cost optimization opportunities of Tabula Rasa Healthcare

REVENUES ANALYSIS

Foundation Medicine (FMI) Revenues And Revenue Growth From 2012 To 2016

This report provides the last five years revenues and revenue growth of Foundation Medicine, Inc. (FMI) from 2012 to 2016. Foundation Medicine generated a total of $116.9 million revenues during 2016. Foundation Medicine reported a revenue growth of 25.4% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in December.

Foundation Medicine (FMI) Revenues And Revenue Growth From 2011 To 2016

This report provides the last six years revenues and revenue growth of Foundation Medicine, Inc. (FMI) from 2011 to 2016. Foundation Medicine generated a total of $116.9 million revenues during 2016. Foundation Medicine reported a revenue growth of 25.4% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in December.

Foundation Medicine (FMI) Revenue Growth Comparison With Industry Growth From 2012…

This report provides a comparison of Foundation Medicine, Inc. (FMI) revenue growth with Healthcare Research Services industry growth during the last five years from 2012 to 2016. Foundation Medicine reported a revenue growth of 25.4% year-over-year during 2016. The Healthcare Research Services industry growth was 14.8% year-over-year during 2016. Foundation Medicine growth was faster than the industry during 2016.

PROFIT ANALYSIS

Foundation Medicine (FMI) Net Profit And Net Margin From 2015 To…

This report provides the last two years net profit and net margin of Foundation Medicine, Inc. (FMI) from 2015 to 2016. Foundation Medicine reported a total net income of -$113.2 million during 2016. Foundation Medicine generated a total of $116.9 million revenues during 2016. Foundation Medicine net profit margin was -96.9% during 2016. The net profit and the net profit margin correspond to the fiscal year ending in December.

Foundation Medicine (FMI) Net Profit And Net Margin From 2011 To…

This report provides the last six years net profit and net margin of Foundation Medicine, Inc. (FMI) from 2011 to 2016. Foundation Medicine reported a total net income of -$113.2 million during 2016. Foundation Medicine generated a total of $116.9 million revenues during 2016. Foundation Medicine net profit margin was -96.9% during 2016. The net profit and the net profit margin correspond to the fiscal year ending in December.

Foundation Medicine (FMI) Net Profit Margin Comparison With Industry From 2012…

This report provides a comparison of Foundation Medicine, Inc. (FMI) net profit margin with Healthcare Research Services industry net profit margin during the last five years from 2012 to 2016. Foundation Medicine reported a net profit margin of -96.9% during 2016. The Healthcare Research Services industry net profit margin was 4.6% during 2016. Foundation Medicine was less profitable than the industry during 2016.

COST EXPENSES ANALYSIS

Foundation Medicine (FMI) Cost of Sales (COGS) Analysis From 2012 To…

This report provides the last five years cost of sales (COGS) analysis of Foundation Medicine, Inc. (FMI) from 2012 to 2016. Foundation Medicine spent a total of $56.7 million on COGS during 2016. Foundation Medicine generated a total of $116.9 million revenues during 2016. As a percentage of revenues, Foundation Medicine spent 48.6% of its total revenues on COGS during 2016. The cost of sales (COGS) numbers are for the fiscal year ending in December.

Foundation Medicine (FMI) Research & Development (R&D) Spending Analysis From 2012…

This report provides the last five years research and development (R&D;) expenses of Foundation Medicine, Inc. (FMI) from 2012 to 2016. Foundation Medicine spent a total of $67.4 million on research and development (R&D;) activities during 2016. Foundation Medicine generated a total of $116.9 million revenues during 2016. As a percentage of revenues, Foundation Medicine spent 57.6% of its total revenues on R&D; activities during 2016. The R&D; spending numbers are for the fiscal year ending in December.

Foundation Medicine (FMI) Sales, Marketing, General & Administrative (SG&A) Spending Analysis…

This report provides the last five years sales, marketing, general & administrative (SG&A;) expenses of Foundation Medicine, Inc. (FMI) from 2012 to 2016. Foundation Medicine spent a total of $106.6 million on sales, marketing, general, and administrative (SG&A;) activities during 2016. Foundation Medicine generated a total of $116.9 million revenues during 2016. As a percentage of revenues, Foundation Medicine spent 91.2% of its total revenues on SG&A; activities during 2016. The SG&A; spending numbers are for the fiscal year ending in December.

WORKING CAPITAL ANALYSIS

Foundation Medicine (FMI) Inventory Spending Analysis From 2012 To 2016

This report provides the last five years inventory spending analysis of Foundation Medicine, Inc. (FMI) from 2012 to 2016. Foundation Medicine invested a total of $10.4 million on inventories during 2016. Foundation Medicine generated a total of $116.9 million revenues during 2016. As a percentage of revenues, Foundation Medicine invested 8.9% of its total revenues on inventories during 2016. The inventory numbers are for the fiscal year ending in December.

Foundation Medicine (FMI) Accounts Receivable (A/R) Analysis From 2012 To 2016

This report provides the last five years Accounts Receivable (A/R) analysis of Foundation Medicine, Inc. (FMI) from 2012 to 2016. Foundation Medicine invested a total of $10.2 million on accounts receivable during 2016. Foundation Medicine generated a total of $116.9 million revenues during 2016. As a percentage of revenues, Foundation Medicine invested 8.7% of its total revenues on accounts receivable during 2016. The accounts receivable numbers are for the fiscal year ending in December.

Foundation Medicine (FMI) Accounts Payable (A/P) Analysis From 2012 To 2016

This report provides the last five years Accounts Payable (A/P) analysis of Foundation Medicine, Inc. (FMI) from 2012 to 2016. Foundation Medicine invested a total of $11.9 million on accounts payable during 2016. Foundation Medicine generated a total of $116.9 million revenues during 2016. As a percentage of revenues, Foundation Medicine invested 10.2% of its total revenues on accounts payable activities during 2016. The accounts payable numbers are for the fiscal year ending in December.

ASSET MANAGEMENT ANALYSIS

Foundation Medicine (FMI) Property, Plant & Equipment (PP&E) Investment Analysis From…

This report provides the last five years property, plant & equipment (PP&E;) investment analysis of Foundation Medicine, Inc. (FMI) from 2012 to 2016. Foundation Medicine invested a total of $41.5 million on property, plant & equipment (PP&E;) activities during 2016. Foundation Medicine generated a total of $116.9 million revenues during 2016. As a percentage of revenues, Foundation Medicine invested 35.5% of its total revenues on PP&E; activities during 2016. The PP&E; investment numbers are for the fiscal year ending in December.

Foundation Medicine (FMI) Intangible Assets Analysis 2016

Intangible Assets Investment analysis for Foundation Medicine is not available because either the company does not provide the data or we don’t have it.