Genomic Health reported a loss of $0.20 per share in the third
quarter of 2014, which deteriorated substantially from the year-ago
earnings figure of $0.02 but was narrower than the Zacks Consensus
Estimate of a loss of $0.23. Revenues jumped 4.7% to $69.1 million,
but missed the Zacks Consensus Estimate of $71 million. We are
encouraged with a solid 9% hike in the number of Oncotype DX tests
delivered. Moreover, the company now covers more than 86% of
Canada's population a reasonable achievement in the international
market. Genomic Health is also progressing well in the U.K. on the
final guidance recommended by NICE. Furthermore, the 35% hike in
orders of Oncotype DX prostate cancer test is also encouraging.
However, challenges remain in the form of higher cost and operating
expenses. We are also anxious about Genomic's major reliance on a
single product. We thus remain Neutral' on the stock.
Genomic Health Inc., founded in 2000 and headquartered in
Redwood City, CA, is a global cancer company with a focus on
advanced molecular diagnostics. The company is involved in the
development and commercialization of genomic-based clinical tests
for cancer diagnosis that enables physicians to make individualized
Genomic's first product, the 21-gene Oncotype DX breast cancer
test launched in Jan 2004, is used to predict the likelihood of
cancer recurrence, patient survival within 10 years of diagnosis
and chemotherapy benefit for early stage breast cancer patients. At
present, Onco type DX has been extensively evaluated in invasive
breast cancer in fifteen clinical studies involving more than 5,000
breast cancer patients worldwide.
In Jan 2010, the company launched its Oncotype DX colon cancer
test with a list price of $3,200 which was hiked to $3,640
effective Jul 1, 2012 (from $3,280 Jul 1, 2011). The 12-gene
diagnostic test aims to predict individual recurrence risk in stage
II colon cancer patients after surgery although the test is yet to
make any significant contribution to the top line. In Nov 2013, the
Current Medical Research & Opinion published positive results
from the Partnership for Health Analytic Research clinical utility
analysis of the Onco type DX colon cancer test, demonstrating that
use of the test changes treatment recommendations in 29% of stage
II colon cancer patients.
In May 2013, Genomic Health commercialized Oncotype DX prostate
cancer test. The launch of the prostate cancer test, developed in
collaboration with the University of California, San Francisco
(UCSF) and Cleveland Clinic was based on the disclosure of positive
clinical validation study at the 2013 American Urological
Association (AUA) Annual Meeting in San Diego. Besides clinical
elements such as PSA and biopsy Gleason Score, the results from the
clinical validation study affirm that the test's ability to predict
the aggressiveness of the cancer in patients.
Renal cancer: Genomic, in collaboration with Pfizer, is working
on developing a genomic test for estimating the risk of recurrence
following surgery, in patients with stage I-III renal carcinoma
(clear cell type) that has not spread to the other parts of the
body. The clear cell type of renal carcinoma is the most common
type of kidney cancer in adults. In Jun 2010, results from the
first renal gene identification study were presented, which
demonstrated a strong correlation between gene expression and
recurrence risk in this patient population. Consequently, the
company plans to move forward with a clinical validation study to
evaluate a potential renal cancer product.
Genomic Health, Inc. (GHDX): Read the Full Research
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