Zacks_Analysts' Blog : Genomic Health to Showcase Key Data - Analyst Blog

Genomic Health (GHDX), an oncology based biotech company, will present results from 16 studies at the San Antonio Breast Cancer Symposium in December. The company has been recording robust revenue growth over the last few quarters banking on its flagship product, Oncotype DX breast cancer test.

The test is used for early stage breast cancer patients to predict the likelihood of cancer recurrence, patient survival within 10 years of diagnosis and chemotherapy benefit. Although the Oncotype DX colon cancer test was launched in 2010, it is yet to make a significant contribution to the top line.

Genomic Health has undertaken several studies to expand the use of Oncotype DX. The company is studying the utility of the Oncotype DX test in patients with ductal carcinoma in situ (DCIS). Preliminary results of the study were presented in May 2011, which met its primary endpoint.

Encouraged by the positive findings, Genomic Health plans to make available the Oncotype DX DCIS Score to patients and physicians on a global basis by the end of 2011. Complete results from the study will be presented at the upcoming conference. Successful development of the test will be of immense benefit to a huge patient population as DCIS is an increasingly detected subgroup of breast cancer, and more than 45,000 patients are diagnosed with DCIS each year in the US alone.  

The other presentations to be made include clinical research study for biomarker discovery using next generation sequencing (NGS) technology in fixed paraffin embedded tissue and multiple international studies on the impact of Oncotype DX on changing treatment decisions.

Going forward, Genomic plans to provide a platform for whole-genome transcription profiling and mutation analysis for large clinical studies using fixed paraffin-imbedded tissue. This plan is based on the expectation that in the future, physicians and patients will require a comprehensive genomic analysis including specific mutations and gene expression, for better informed treatment decisions.

Having established a strong foothold in the US market, Genomic Health is targeting the international arena. During the most recent quarter, revenues from the international market jumped 80% and now represent 10% of total product revenues. However, securing reimbursement outside the US is a major deterrent to expanding the overseas business. The company expects revenue from the international market to be an important driver of revenue growth in 2012. We believe favorable data from worldwide studies might help the company in securing reimbursements.

We have a Neutral recommendation on the stock.