Genomic Gains Coverage for DCIS - Analyst Blog
13 Mayo 2013 - 9:20AM
Zacks
Genomic Health
Inc. (GHDX) continues to make strides towards establishing
coverage for its Oncotype DX breast cancer test. The company
disclosed that the assigned contractor for its Oncotype DX breast
cancer test Palmetto GBA has expanded coverage policy for all
eligible Medicare patients to include those for ductal carcinoma in
situ (DCIS) diagnosis, effective May 8, 2013.
This will lead to a sizeable increase in the number of lives
covered for Genomic Health’s breast cancer test. The decision was
based on the recent publication of the Oncotype DX breast cancer
test’s DCIS Score in the peer-reviewed Journal of the National
Cancer Institute.
DCIS is pre-invasive tumor with reduced risk of recurrence. The
Oncotype DX DCIS Score is a prognostic index to assess 10-year
local recurrence, DCIS or invasive carcinoma in patients. The DCIS
Score is established on a patient’s characteristic intrinsic tumor
biology, irrespective of whether adjuvant tamoxifen is given to the
patient. Besides usual clinical factors such as the size and grade
of the tumor, surgical margins and menopausal status of the women
with DCIS, the DCIS Score yields other crucial information.
Our Take
We are encouraged with the progress made by Genomic Health on the
reimbursement front. Presently, over 95 million lives across the
globe are covered for the company’s gamut of tests. Following the
market opportunity for tests to detect early-stage prostate cancer
and invasive breast cancer, the patient needs for DCIS breast
cancer presents the third largest market opportunity among Genomic
Health tests.
The prevalence of DCIS is alarmingly high in the U.S. with over
50,000 patients diagnosed annually. In light of this fact, the
expanded coverage policy is likely to improve adoption rates in a
highly underpenetrated market.
With the DCIS reimbursement in the U.S., one of the priorities of
Genomic Health for 2013 has been accomplished. We look forward to
the company’s effort to expand private coverage for its Oncotype DX
colon cancer test.
On the flip side, Genomic Health’s financial results continue to be
highly affected by the performance of the Oncotype DX breast cancer
test as the Oncotype DX colon cancer test has failed to make any
sizeable contribution to revenues. Nonetheless, the market
availability of its lead pipeline product – Oncotype DX prostate
cancer test, announced on May 8, 2013, is a major upside for the
company. The commercialization of the prostate cancer test will
allow Genomic Health to serve a global market size of more than
$1.6 billion.
The stock carries a Zacks Rank #3 (Hold). Other medical sector
stocks such as Myriad Genetics Inc. (MYGN) and
Conceptus Inc. (CPTS), carrying a Zacks Rank #1
(Strong Buy) warrant a look. Celgene Corporation
(CELG), carrying a Zacks Rank #2 (Buy) is also worth
considering.
CELGENE CORP (CELG): Free Stock Analysis Report
CONCEPTUS INC (CPTS): Free Stock Analysis Report
GENOMIC HEALTH (GHDX): Free Stock Analysis Report
MYRIAD GENETICS (MYGN): Free Stock Analysis Report
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