Genomic Health Inc.
) 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.
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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
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.
), carrying a Zacks Rank #1 (Strong Buy) warrant a look.
), carrying a Zacks Rank #2 (Buy) is also worth considering.