Genomic Health
(
GHDX
) recently announced positive data from three new studies of its
flagship product Bracanalysis. The studies evaluated cost
effectiveness of the test within the healthcare systems of Germany
and Hungary. Another study from Israel dealt with the significance
of the test on deciding treatment decisions in early-stage invasive
breast cancer patients with lymph-node positive status. The company
will present these data at a breast cancer conference, currently
underway in Vienna, Austria.
Results from the study, conducted in Germany, with 366 patients
found that the Oncotype DX test changed initial recommendations in
33% of the cases resulting in increased survival rates. Besides,
the test was found to be cost effective in both the studies
conducted in Germany and Hungary. The study carried out in Israel
demonstrated that the use of the Oncotype DX test in patients with
estrogen receptor-positive, node-positive, breast cancer is likely
to reduce use of chemotherapy.
While Genomic currently has two products in its portfolio,
Oncotype DX breast and Oncotype DX colon cancer tests, the latter
has yet to make any significant contribution to the top line.
Banking on its several strategies directed toward an increasing
acceptance of the Oncotype DX test, Genomic is well placed to make
most of the huge market potential.
Genomic Health also diversified its offering with the launch of
the Oncotype DX DCIS Score at the end of 2011. Besides, we are
encouraged by the progress made by the company on the reimbursement
front. Consequently, we expect the growth momentum to continue for
the time being. However, the company faces tough competition from
players such as
Myriad Genetics
(
MYGN
) and
Cepheid
(
CPHD
), among others.
Given the huge market opportunity in DNA sequencing, we are
impressed with Genomic's decision to set up a wholly owned genetics
subsidiary by this month. This decision will involve an investment
worth $20 million over the next two years. Genomic was drawn to the
sequencing business in the wake of reduced costs for sequencing a
genome and the frontiers that can potentially open up in medical
applications influencing millions of lives. Genomic expects this
business to be a long-term contributor to its growth profile.
We currently have a Neutral recommendation on Genomic Health.
The stock retains a Zacks #3 Rank ("hold") in the short term.
CEPHEID INC (
CPHD
): Free Stock Analysis Report
GENOMIC HEALTH (
GHDX
): Free Stock Analysis Report
MYRIAD GENETICS (
MYGN
): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment
Research