Genomic Health: A Prostate Play Helping Investors Get Ahead Of The Curve?

In a recent note, Cowen and Company analyst, Doug Schenkel, elaborated that Genomic Health’s revenue growth has stagnated at an average rate of 4 percent over the past seven quarters, while ranging from 0 to 2 percent in three of the last four quarters.

This stagnation has been driven to a large extent by moderation in revenue growth for the OUS and Invasive Breast segments, along with limited revenue contribution from the company’s new products.

Related Link: A Portfolio To Support Cancer Treatments

Growth Drivers Ahead

However, Schenkel believes that all this is poised to change, driven by Oncotype DX for Prostate Cancer, which is now part of the clinical guidelines, “being reimbursed in certain indications by CMS, and is positioned for expanded coverage by CMS and private payers over the coming quarters.”

The prostate revenue opportunity in the United States is estimated at $600 million, and there are only two major products in the market for pre-surgery testing.

According to the Cowen report, the other growth drivers for Genomic Health include “(1) broader access to and reimbursement for Oncotype DX for Breast Cancer in Europe, (2) expanding indications for and coverage of invasive breast cancer, DCIS, and colon cancer testing in the United States and (3) a longer-term opportunity in liquid biopsy.”

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