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Total revenue increased to $27.8 million in the second quarter of 2008compared to $14.7 million in the second quarter of 2007. Product revenue fromthe Oncotype DX(R) breast cancer assay was $26.3 million in the second quarterof 2008, an increase of 81 percent compared to $14.6 million in the secondquarter of 2007, the result of continued growth in adoption and reimbursement.Contract revenue was $1.5 million in the second quarter of 2008, compared to$135,000 in the second quarter of 2007, reflecting continued collaborationwith pharmaceutical partners to explore the development of tests forpredicting benefit from certain targeted therapies.
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"We believe the increasing impact of personalized medicine and ourinvestment in Oncotype DX are reflected not only in our strong revenue andgrowth in tests delivered, but also in the narrowing of our net loss in thesecond quarter," said Randy Scott, Ph.D., chairman and chief executive officerof Genomic Health. "While we work to further reduce our net loss, we willcontinue to invest in our product pipeline and expand our commercial effortsoutside of the United States, which we expect to be important components offuture growth."
Additional Second Quarter 2008 Financial Results
During the second quarter of 2008, approximately 51 percent of productrevenue was recorded on an accrual basis and recognized at the time the testresults were delivered, reflecting established payment patterns from payorswith coverage policies in place.
Cost of product revenue was $6.9 million in the second quarter of 2008,compared to $4.2 million for the second quarter of 2007. Research anddevelopment expenses for the second quarter of 2008 were $7.3 million,compared to $5.2 million for the same period in 2007. Selling and marketingand general and administrative expenses for the second quarter of 2008 were$18.1 million, compared to $12.9 million for the same period in 2007. Includedin second quarter 2008 operating expenses was $2.3 million of stock-basedcompensation expense, compared to $1.5 million in the same period in 2007.
Net loss was $4.1 million in the second quarter of 2008, compared to$7.2 million in the second quarter of 2007. Basic and diluted net loss pershare was $0.15 in the second quarter of 2008, compared to a net loss pershare of $0.28 in the second quarter of 2007.
Financial Results for Six Months Ended June 30, 2008
Total revenue for the six months ended June 30, 2008 was $51.2 million,compared to $28.8 million for the first six months of 2007. Product revenuefor the six months ended June 30, 2008 was $49.7 million, compared to$27.7 million for the first six months of 2007. Contract revenue constitutedthe balance of revenue for the first six months of 2008 and 2007.
Cost of product revenue for the six months ended June 30, 2008 was$12.7 million, compared to $8.0 million for the comparable period in 2007.Research and development expenses for the first six months of 2008 were$13.7 million, compared to $10.4 million in the first six months of 2007.Selling and marketing and general and administrative expenses for the firstsix months of 2008 were $36.3 million, compared to $25.2 million in the firstsix months of 2007. The increase in expenses includes stock-based compensationexpense of $4.5 million in the first six months of 2008 compared to$2.8 million for the same period in 2007.
Net loss for the six months ended June 30, 2008 was $10.7 million,compared to $14.0 million for the first six months of 2007. Basic and dilutednet loss per share was $0.38 for the six months ended June 30, 2008, comparedto a net loss per share of $0.55 for the first six months of 2007.
Cash and Cash Equivalents
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