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Canaccord Genuity Upgrades Genomic Health to Buy

NEW YORK (GenomeWeb) – Canaccord Genuity has upgraded its rating for Genomic Health to Buy from Hold, the investment banking company said today.

After surveying and interviewing urologists, Canaccord analyst Mark Massaro wrote in his note, the bank found that Genomic Health has the best brand awareness for its cancer tests. "To our surprise, more docs responded they are aware of GHDX's test over MYGN's test, despite MYGN's first mover advantage, which we think is a testament to GHDX's solid early marketing and commercial initiatives," he added.

Canaccord's survey indicated that 56 percent of physicians were likely or highly likely to order Genomic Health's prostate test in 2016, compared to 48 percent for Myriad's Prolaris test, according to the note.

Also affecting the stock positively was the recent decision from the Centers for Medicare and Medicaid Services to reimburse Medicare patients for Genomic Health's Oncotype DX prostate cancer test. "We believe the risk/reward on the stock has swung to the upside following GHDX's Medicare reimbursement decision for its prostate test in October and our higher visibility for prostate test growth," Massaro wrote.

And despite an approximate 50 percent run up in the stock since the company posted Q3 results, the shares remain undervalued, he added.

Canaccord also raised Genomic Health's price target to $44 from $26.

The GenomeWeb Index found Genomic Health was one of the winners of 2015 — its stock was up more than 10 percent year over year.

The company's stock was up nearly 3 percent at $34.94 in mid-afternoon trading on the Nasdaq.